If you are beginning to estate plan, you are already on a great path for planning for the future. However, estate planning can be complicated and there are many factors you will need to consider. One of these is determining powers of attorney.
Powers of attorney grant authority to one person to make decisions on your behalf if you are incapacitated in some way and no longer able to. There are two types of powers of attorney and both are important for a comprehensive and effective estate plan.
Financial power of attorney
Someone given financial power of attorney has the responsibility of making financial decisions. This can include controlling investments, selling or transferring property, handling taxes and day-to-day expenses. This person can also deal with your mortgage, retirement fund and insurance.
Medical power of attorney
Appointing someone for medical power of attorney is similar to financial power but this person will make medical decisions instead of monetary ones. A medical power of attorney lets someone act as a health care agent for you when you cannot make decisions for yourself.
This person should uphold your prior wishes about your health care and can make decisions about your health including admitting or discharging you from a hospital or nursing home and who has access to your medical records.
Why should you appoint power of attorney?
Appointing a specific person can help make sure that the right person makes decisions for you. This way, it can be someone you know you trust and will make the best choices. If you do not have an appointed power of attorney, there is a legal order of people who will make decisions for you starting with a court-appointed conservator or guardian.
Appointing a financial and medical power of attorney will help ensure that all your wishes are followed even when you cannot make decisions them for yourself. Having an appointed power of attorney will also help your family avoid extra expenses and time. If you become incapacitated without a power of attorney, your family will have to obtain a guardianship which involves petitioning court.
Durable power of attorney is essential in estate planning and can save your loved ones time and stress. If you do not have a power of attorney appointed you may want to speak to an attorney about setting one up.