Establishing a Power of Attorney is an important part of estate planning. There are actually two types of Power of Attorney: Those that handle medical decisions, and those designated to handle your financial affairs. You can choose the same person to fill both roles, or different people if you prefer.
When you establish a Power of Attorney to handle your financial business, keep in mind the type of tasks this person will be performing. Acting on your behalf, he or she can:
Buy or sell your home
Open bank accounts
Withdraw money from your bank account
Make decisions regarding insurance
File your taxes
And many more financial-related tasks
Obviously, the Power of Attorney is an important role. But you probably don’t want this person to dive right in and begin making those decisions right now. The point of establishing a Power of Attorney now, is to have that person designated and ready to take over in the event that you become incapacitated. At that point, it might be too late to name the person yourself.
Should you become incapacitated without a Power of Attorney, often a court will establish a Conservatorship on your behalf. This can even be the case with married couples at times, as courts don’t always grant Conservatorship to the spouse. Now someone has the power to handle your financial affairs, but it might not be the person you would have chosen.
Meanwhile, a Power of Attorney for healthcare decisions is called an Advanced Healthcare Directive. This person makes medical decisions, in the event that you’re incapacitated. As with the financial Power of Attorney, it is always better to choose this person yourself rather than leave it up to the courts.
If you have questions about establishing either of these types of Power of Attorney, give us a call. We can walk you through the process and get these important legal documents in place.