When most people think of estate planning they think of how they’re going to bequeath their assets to heirs, but estate planning is also about planning for the inevitable end of life process. One tool that helps empower you is the durable power of attorney (POA). Let’s take a look at how you can properly use a power of attorney as part of your estate planning.
Types of POA
There are two different types of power of attorney, 1) a POA that gives an authorized person the power to make decisions about your healthcare if you’re incapacitated and 2) a POA that gives an authorized person the power to make financial decisions for you in the case of your incapacitation. It’s advisable to get both as part of your plan for the end of life process.
Levels Of Power
Many people planning their estates get nervous about POAs because they fear giving someone too much control over their life. But their fears are often exaggerated because POAs can be written to allow the authorized person limited powers. For example, you might have your POA state that the authorized person can only pay bills on your behalf, but cannot take out new debt.
It’s important that POAs are created before you actually need them since they are only valid if created by someone who is of sound mind. This means that if you were to develop dementia, you would be unable to create a power of attorney at that time. If your loved ones wanted to take charge of your affairs at that point they would need to get a court to appoint them as your guardian. A little advanced planning will give you the power to decide who will be the one to care for you in case you’re incapacitated. It also give you the time to discuss your wishes beforehand.
As long as you’re of sound mind you have the power to change or revoke a power of attorney. A matter of fact, it’s important that you make reviewing your power of attorney every few years a priority to make sure that the person you’re authorizing is still up to doing it.
If you want to learn more about durable power of attorney, please contact me at anytime, I’ll be happy to help with your questions.