Estate planning involves making decisions today to ensure your wishes are followed in the future, especially if you become unable to manage your affairs. One of the key documents in this process is a power of attorney (POA). This legal tool allows someone you trust to act on your behalf if you become incapacitated.
What is a power of attorney?
A power of attorney is a legal document that designates an individual, called an agent, to make decisions for you. These decisions can be related to finances, healthcare, or both, depending on the type of POA you create. The most common types are durable, healthcare, and financial powers of attorney. A durable POA remains in effect if you become incapacitated, while a healthcare POA focuses specifically on medical decisions.
Why is a power of attorney important?
If you are incapacitated and unable to make decisions for yourself, a POA ensures that your financial and medical needs are met. Without a POA, your family might need to go to court to gain the authority to act on your behalf. This process can be time-consuming and expensive, and it may lead to disagreements among family members.
How a power of attorney protects your family
By naming a trusted agent in your POA, you provide clear instructions on how decisions should be made. This can prevent confusion or conflict among family members during difficult times. Your agent can handle your financial responsibilities, like paying bills, managing investments, and making medical decisions, all according to your preferences.
Incorporating a power of attorney into your estate plan offers peace of mind, knowing your loved ones will be prepared to manage your affairs if necessary.