When it comes to estate planning, several important documents need to be put in place. One of the most important ones is a power of attorney, which foresees the possibility that you may become incapacitated and won’t be able to make decisions for yourself.
What is a power of attorney?
A power of attorney is an estate planning document that appoints someone to make decisions for you if you cannot. This person is typically known as the agent or attorney-in-fact. A power of attorney can oversee financial matters, medical decisions or both.
Durable power of attorney
This special designation allows an agent of your choice to continue to make decisions for you even after you become incapacitated. For instance, a healthcare durable power of attorney would allow this agent to make decisions regarding your medical care even if you are unable to speak for yourself.
Springing power of attorney
This type of power of attorney only goes into effect at a certain point in time. For instance, you may choose to have a springing power of attorney for healthcare that only goes into effect if you cannot make your own medical decisions.
Financial power of attorney
A financial power of attorney document appoints someone to handle your financial affairs if you cannot do so yourself. This could include paying bills, managing investments and even selling property.
General power of attorney
This is a very broad document that gives your agent the authority to make any legal decisions on your behalf. It ends automatically when you become incapacitated.
Special power of attorney
This document is used for specific situations, such as when you need someone to represent you in a legal matter. This is different from a general power of attorney, which gives your agent broad authority to make decisions for you.
There are many more types of power of attorney designations that you can choose from depending on your specific needs. Just remember that it is important to choose an agent who you can trust to make decisions that reflect your wishes and values.