Powers of Attorney
A Power of Attorney gives another individual, company, or organization the right to make your financial, healthcare, and legal decisions if you become unable to do so. Powers of attorney are usually stated in a legal document, which makes it clear and easy upon the transition.
Most of us will choose a power of attorney in the case of illness or incapacity. Choosing the right person to take over your powers of attorney is incredibly important, so you should make sure it is a trusted individual or company that knows you well.
Healthcare Power of Attorney
Medical powers of attorney grant a named individual the right to make decisions about your healthcare should you become unable to do so. Allowing a trusted friend, family member, or organization to take control of your healthcare decisions means your wishes are more likely to be upheld and carried out. Setting this up can also avoid conflict from other parties and protect your best interests. You have the chance to make your wishes known in these documents, and while other family members may not agree, having medical powers of attorney laid out means you are well-prepared in advance.
The types of decisions that your medical power of attorney can hold include:
Personal welfare decisions (such as a daily routine)
Life support decisions (including DNR orders)
Care decisions (such as living in a care facility)
Financial Power of Attorney
Financial powers of attorney grants an individual or entity the rights to control some or all of your assets and financial decisions. This can include decisions about investments, property, and cash, for example. Financial powers of attorney are granted in the same way as medical powers of attorney, and you have the right to choose your spouse, a trusted friend, parent, etc. You decide whether your named representative has general power (over any decision) or specific powers and access to only some of your finances.
Examples of the decisions that a financial power of attorney can make include:
Handle your daily bills
Handle the sale of property such as your home if you were not able to make that decision
Closing bank accounts or gifting cash (and if gifting is allowed make sure it is well-spelled out)
Durable Power of Attorney vs Springing Power of Attorney
As we previously mentioned, you can choose to limit the power of attorney to specific events, scenarios, or timeframes. Of course, these powers are granted while you are unable to make these decisions yourself, so the more specific you can be about your wishes, the more likely they are to be carried out.
Durable power of attorney means that another person is appointed your power of attorney immediately, and this continues in the event that you are unable to make decisions yourself.
Springing power of attorney allows the attorney power to make decisions only for a set event or time period. The details of your documents may also state that power is granted only in a specific area, such as the sale of property.
When assigning your powers of attorney, you should consider what areas you’ll need taken care of should you be unable to make those decisions yourself.
More Information on Powers of Attorney
If you have not yet put a Power of attorney in place or have questions, please get in touch with me to talk about the process, help you find an attorney to draft the powers and more. It is worth discussing estate planning, your wishes and needs with a financial planner in order to create a financial plan in case you need to use your appointed power of attorney.
There are also a number of other resources and programs to help you with this. Five Wishes is a care planner that encompasses both your living will and power of attorney for healthcare. They host a number of online guides, such as conversation guides for those all-important but sometimes difficult conversations around powers of attorney.
We are not attorneys and cannot draft legal documents, but often work with attorneys to get your financial and estate plan in place.