Power of attorney (POA) designations are critical when creating an estate plan. These legal documents allow you to appoint someone to act on your behalf if you become incapacitated. Neglecting to make these arrangements can lead to complicated scenarios for you and your loved ones down the road.
Two main types of POAs are commonly included in estate planning: medical and financial. These designations enable others to make critical decisions for you, and selecting the right individuals for these roles is essential.
Medical power of attorney
A medical POA designates an individual to make healthcare-related decisions on your behalf when you can’t. This could involve decisions about treatments, surgeries or end-of-life care. The designee should be someone you trust implicitly to carry out your wishes, especially during emotional situations.
Financial power of attorney
A financial POA enables someone to handle your financial matters if you’re unable to do so yourself. This could range from paying bills and managing investments to selling property. The scope can be as broad or as limited as you prefer, so it’s crucial to outline the specific powers granted to the designee.
Choosing the right person for these roles
Selecting someone to act as your POA is a significant decision. You must trust that they’ll make choices in line with your beliefs and wishes. It’s also important to inform these individuals of their potential responsibilities and ensure they are willing and capable of taking them on.
Revoking or amending a POA
POA designations aren’t set in stone. They can be revoked or modified as your circumstances or wishes change. However, any changes should be documented clearly and communicated to all relevant parties.
Incorporating POAs into your estate plan provides a safety net for your health and financial well-being. Knowing that your wishes will be honored and your affairs managed responsibly even if you’re incapacitated can give you peace of mind.