Add powers of attorney to your estate planning tools

On Behalf of | Mar 20, 2020 | Estate Planning |

How would manage your financial affairs if you should become incapacitated? Who would make medical decisions for you?

In both instances, a power of attorney, or POA, would take care of the matter and give you peace of mind.

An overall view

You may associate estate planning with the task of winding up your affairs and deciding what your heirs will inherit after you are gone. However, there are estate planning tools that will benefit you while you are still alive. You can create a financial power of attorney as well as a power of attorney for healthcare.

The financial power of attorney

In preparing this kind of POA, you can appoint someone you trust to manage your financial affairs if you cannot do so yourself. It is even helpful for seniors who are still mentally competent but who need additional help with Social Security benefits, bill-paying responsibilities and similar tasks.

The durable power of attorney for healthcare

The person you name in your POA for healthcare will have the authority to make healthcare decisions on your behalf in the event you become incapacitated. He or she will carry out your wishes with respect to your care, including your instructions about end of life matters if you are terminally ill.

Early action

It is important for you to draft both powers of attorney while you are still in good health. If you should receive a diagnosis of dementia as you grow older, you will not be mentally capable of appointing agents to manage your financial needs or make healthcare decisions for you. You can write a POA in two ways. A durable power goes into effect as soon as you sign the document and will remain in effect even if you do not become incapacitated. In a springing power, you name an agent in advance, but this person does not have the legal authority to act on your behalf until such time as you become incapacitated.