Smart estate planners don't simply stop at a last will and testament. Your estate plan will not be complete until you have, at the very least, drafted a power of attorney. Your power of attorney documentation gives a trusted person the authority to make vital decisions on your behalf if you become incapacitated -- perhaps due to an unexpected medical event.
This article will examine the most important decisions that a power of attorney will be able to make on your behalf.
The powers held by your power of attorney
Powers of attorney may give your "attorney in fact" broad powers to make carte blanche decisions on your behalf, or they could be limited in nature. Here are general powers that a designated "attorney in fact" might have:
- Financial decision powers: You can provide a power of attorney with the ability to make financial decisions and take financial action on your behalf. This might be as simple as paying your bills when you become incapacitated. It might also involve monitoring your bank and investment accounts and making decisions about any assets you have.
- Gifting decision powers: A power of attorney might also have the authority to issue gifts on your behalf. This could be important for the purposes of managing your estate.
- Medical decision powers: Powers of attorney with medical decision-making power can make decisions about your care from doctors and hospitals. Perhaps they will approve a surgeon to move forward with surgery. Perhaps they will decide to turn off life support if you become dependent on such technology with no sign of improvement.
- Recommending a guardian: Let's say you are in need of someone to care for you full time, make decisions for you and ensure that all of your daily needs get met. You may need a guardian, and your power of attorney can recommend whom your guardian should be.
Create a power of attorney before it's too late
Your loved ones can obtain decision-making authority for your affairs, even if you don't have a power of attorney in place. However, by creating a power of attorney, you will have a say in who should be the one to decide for you. Also, you can avoid the potential for family arguments and court battles over who should be in charge of your affairs.
Source: National Caregivers Library, "What Is Power Of Attorney?," accessed Aug. 25, 2017