Clarify Your Decisions Regarding Life Care And Finances
After your will, the next most important estate planning documents are effective powers of attorney.
A power of attorney allows you to name another person, known as an attorney-in-fact or agent, to make decisions on your behalf in the event you are physically or mentally incapacitated. A power of attorney can address financial decisions or health care decisions.
General Durable Power Of Attorney (Financial)
A general durable power of attorney allows another person to:
- Manage your financial affairs
- Pay bills and taxes and make gifts
- Collect income, Social Security payments, or retirement benefits
- Buy or sell real and personal property
- Continue running your business
- Initiate or resolve legal disputes
Durable Power Of Attorney For Health Care
A durable power of attorney for health care allows a designated person to:
- Make emergency and nonemergency medical decisions
- Manage other health issues
- Make advance care decisions
You can define the terms of your power of attorney to include any or all of these powers.
The attorney-in-fact can be anyone who is not a minor and who is legally able to enter into a contract — a friend, relative, or associate. The most important requirement is that the attorney-in-fact knows you and knows what your wishes are likely to be.
Why Powers Of Attorney Are Critical
The preparation of a power of attorney is not a complex or expensive undertaking, and is therefore preferred to the alternative of seeking guardianships or conservatorships following incapacity – each of which involves court oversight. Without a valid power of attorney, critical financial and medical decisions may be left unmade.