In recognition of the fact that the failure to have a comprehensive estate plan in place can create unnecessary headaches for their heirs, many people will take the time to execute such essential documents as a simple will, an advance directive for healthcare and a power of attorney.
While those who take this step are to be commended for their wisdom and foresight, the unfortunate -- and perhaps even somewhat unbelievable -- reality is that additional preparation is sometimes necessary, particularly as it relates to things like credit cards, bank accounts or other financial holdings.
That's because while a person might believe that a power of attorney would essentially cover the entirety of their financial matters, it's important to understand that this is only partially true.
Indeed, a power of attorney grants the named party the ability to act on behalf of the person who executed it in all financial matters (unless it's purposefully limited) in the event of their incapacity. As such, it essentially ceases upon the death of the incapacitated person.
To illustrate the types of problems this can create, consider a credit card account.
While the person granted power of attorney would likely not experience any problems making payments and otherwise managing the account while the account holder was alive, they may find these management abilities severely compromised in the aftermath of their passing.
Specifically, they may be informed that they are lacking the authority to close the account or that they will have to jump through considerable obstacles to accomplish what was once simple.
According to experts, it's because of potential scenarios like these that those executing comprehensive estate plans should give some thought to contacting their various financial institutions to determine what processes and procedures must be followed to ensure that account management can continue virtually uninterrupted upon their demise.
If you have questions relating to estate planning, wealth transfer strategies or estate administration, do not hesitate to consider speaking with an experienced legal professional who can provide the necessary answers and the necessary solutions.