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What should you know about powers of attorney?

On Behalf of | Feb 14, 2023 | Estate Planning

Many people think about their will when they consider an estate plan but that’s not the only legal resource that they need to create when crafting an estate plan. Another important reference to prepare when you’re working on your estate plan is at least one power of attorney designation.

A power of attorney gives someone the authority to make specific decisions for you if you’re incapacitated due to illness or injury. These powers are valid only until you pass away.

Power of attorney for medical care

A power of attorney for medical care – along with an advance healthcare directive – allows you to direct the kinds of care you’re willing to receive if you’re incapacitated. Your power of attorney must respect the decisions you’ve put into an advance directive. Certain decisions you make, such as not wanting to be resuscitated, may require a special form on file. Otherwise, your power of attorney will make any decisions in re: issues not covered in an advance directive on your behalf until you regain the ability to make decisions on your own or you pass away.

Power of attorney for finances

A power of attorney for finances makes decisions about your assets while you’re incapacitated. They also pay your bills. They can buy or sell assets on your behalf, as directed by any instructions you’ve left for them. They should have access to at least one bank account so they can pay things for you. Once you pass away, the power of attorney becomes invalid because all financial decisions are covered by the person who’s administering your estate.

Choosing power of attorney designees

You can name the same person for both power of attorney positions or you can have one for each. The individuals you choose should have your best interests at heart. They can’t make self-serving decisions. It’s typically best for you to discuss your wishes with them so they know what you want. Ideally, they’ll live within driving distance of you so they can step in as needed to do things on your behalf.

Creating a comprehensive estate plan is crucial. Working with someone who’s familiar with these matters can help you to ensure you get things done in a manner that accurately relays your wishes. Doing this should give you peace of mind since you’ll know that your loved ones have a plan to follow if and when something happens to you.