Durable Power of Attorney
Durable power of attorney is a legal document that lets you appoint a person to act on your behalf in regard to personal finances and health care. The 'durable' aspect gives additional authority to the attorney-in-fact that keeps their powers in effect should you become unable to manage tasks due to illness or injury.
Without a durable power of attorney, loved ones cannot handle your financial affairs nor have any input regarding medical decisions. Instead, they will have to appear to court to obtain authority while in the midst of a crisis. This can easily be avoided by executing both a medical and financial power of attorney.
It's best to consult with an estate planning lawyer to discuss available options and ways to protect both you and your property. However, POA documents can be prepared using online legal services such as LegalZoom or buying preformatted forms at office supply stores or via the Internet.
A durable power of attorney for finances is recommended for anyone that has any type of personal finance matters. If you have bills to pay or money to safeguard, it's a good idea to give someone you trust the authority to take care of things if you're incapacitated.
In addition to authorizing a person to pay bills, a financial power of attorney lets the attorney-in-fact handle investment or retirement accounts; make deposits into bank accounts; or even file a personal tax return.
A medical power of attorney lets you put in writing the type of health care treatment you want or don't want if you are unable to speak for yourself. The designated agent is required by law to comply with your wishes and inform medical personnel of decisions outlined in the POA.
Depending on the state where you reside, you might need to write a living will that outlines health care directives. Due to confidentiality laws, health care providers cannot release medical records to a spouse, relative, or attorney without a release of records and personal health information consent form.
Both health care and financial information are sensitive matters that can't be turned over to just anyone. Most people appoint their spouse or family member as their attorney-in-fact, but this person could also be a lawyer, estate planner, or personal friend.
When granting POA rights to family members it's usually best to designate the same person as the agent for both medical and financial power of attorney. While this is not a requirement, it can make things run more efficiently. At the very least appoint two agents that can work well together.
Setting up power of attorney privileges is also an important aspect of estate planning. Putting affairs in order is one of the greatest gifts anyone can leave their family. Settling an estate without directives provided through a last will and testament is an overwhelming task that is magnified when a person is grieving the loss of a loved one.
Writing a Will helps to ensure that relatives, friends, and charitable organizations receive the gifts you want them to have. Wills are necessary whether an estate passes through probate or is protected by a trust. This document provides directives on estate settlement and distribution of inheritance property and is vital for establishing guardianship for minor children.
If you're confused about how to protect estate assets or searching for information on how to get started, we offer a comprehensive estate planning article library covering topics of how to write a Will or setup a trust; strategies to avoid probate; tips for designating a personal representative; and the different types of durable power of attorney forms.