There are many things to consider when creating your estate plan, such as executors, advance care directives and trusts.
Another essential component is naming a power of attorney (POA). But is having one POA enough?
Different POAs for different functions
A power of attorney (POA) is a legal document that allows you to appoint someone to manage your property, finances or medical care. Understanding the different types of POAs and how they can be used to ensure you have the right one for your situation is essential.
A financial (POA) authorizes an individual (agent) to manage your (principal) financial affairs. The agent is granted all the powers by the principal, including the authority to manage bank accounts and investment accounts, file taxes, write checks and access other assets and resources. Financial POAs can be either durable or non-durable. A durable POA continues in effect even if the principal becomes incapacitated, while non-durable ones are designed to only last for specific times or situations.
A medical POA allows you to appoint someone to make decisions regarding your health care if you are unable to do so yourself. It grants the agent authority to access your medical records, speak to doctors on your behalf and make decisions about your treatment for you.
Having two separate powers of attorney in place has many benefits. It divides the responsibility between two people and prevents any one person from having too much influence. Additionally, it gives you more control over specifying who is responsible for managing each aspect of your life.
No matter what type of POA you decide is best for your situation, it’s crucial that you make it a part of your estate plan. Having these documents in place can give you and your family peace of mind.