Powers of Attorney: Why You and Your Parents need them.
Being proactive in life is a good thing, especially when planning for the future. We often think of getting a Will or Trust completed, and that is a great start. However, another important and necessary Estate Planning tool is the Power of Attorney.
While a Will or Trust will affect what happens to your property after death, you must also consider who will make financial and medical decisions for you if you become disabled or incapacitated. Even if you have a spouse, you may not want him or her to handle finance matters or make medical decisions for you for various reasons. I have had many clients who have made such decisions.
Although a difficult discussion to start with a love one, it is one worth having. We may be living longer, but sometimes longer does not always mean capably. You will need a document that can carry out your intentions regarding property and health if you become ill or unable to make these decisions on your own. More important, a Power of Attorney can help you avoid the need for a Guardianship or Conservatorship, where a court will decide who will make decisions regarding your health and/or financial matters. Further, the procedure for one is costly (your estate will pay for it), takes time, and is public.
Durable Powers of Attorney
The two powers of attorney that everyone should have are a Durable Power of Attorney and a Durable Power of Attorney for Health Care. A Durable Power of Attorney, in general, gives someone the power to make financial decisions regarding your estate when you cannot. This power can also extend to your business, but you should discuss the pros and cons of giving that power to someone with an attorney. The Durable Power of Attorney for Healthcare is designed to give someone the power to make medical decisions on your behalf when you are determined incapable of making your own decisions. In both cases, the powers only become active when you cannot make decisions, not before, and they remain active during your incapacity. This feature is what makes them durable.
Your make the choice
Both types give you the power now to choose the individual you would like to make these important decisions for you when you cannot. Again, you should also discuss with your parents the need for these as well. Hospitals, care facilities, etc., require a power of attorney for healthcare from the person who wishes to make decisions regarding the health of a patient or resident. I will discuss more about each of these in future articles.