Estate planning is most commonly associated with the distribution of assets upon a person’s death. While this is a fundamental aspect of the process, there are also other elements that comprise a basic estate plan.
A Power of Attorney (POA) is a designation that allows someone else to make key decisions on your behalf should you become incapacitated. Outlined below are the two key types of POAs.
Healthcare POA
You’ve always taken care of your health. Sadly, medical emergencies do happen that are beyond any patient’s control and there may come a time when you are no longer able to express your wishes to doctors and other members of your care team. A medical POA can take over this role should this happen. They will oversee your medical care and make decisions on your behalf according to the explicit wishes you have set out in a POA document.
Financial POA
Major financial decisions can become overwhelming for elderly individuals or those who are vulnerable because of health issues. You may not always be best placed to make financial decisions that are in your best interests. A financial POA allows you to delegate these responsibilities to a responsible party who can make decisions for you in your best interests. Importantly, you can limit the jurisdiction of a financial POA if you want to. For example, your financial POA may only be entitled to make decisions regarding your retirement accounts and not other areas of your finances.
As you can see, there are numerous estate planning tools that can help you, including a POA. To better ensure that you implement the appropriate plan elements for your circumstances, it may benefit you to seek legal guidance.