We’ve all heard horror stories of elderly or disabled family members being placed in a facility with deplorable living conditions and abusive staff members. Or the children of an Alzheimer’s patient who labor in court for months, draining their savings, trying to appoint a guardian over their parent’s financial or medical matters. An ordinary will does nothing to prevent these situations, but a durable power of attorney could.
A durable power of attorney is like a will in that it is a written document arranged in preparation for events that may occur in the future. The primary difference is that a will appoints an executor to handle your affairs after your passing, and a durable power of attorney appoints a representative to handle your you are alive, but incapacitated. Incapacitation is considered the inability to make or understand decisions due an accident, injury, or illness.
There are two types of durable powers of attorney required to maintain your affairs in the event you are unable to do so:
Durable Healthcare Powers of Attorney allow you to appoint a trusted friend or family member – an agent – to make decisions regarding your healthcare. This person does not have be a medical professional, but it should be someone who understands your wishes and can be trusted to carry them out. Your agent will be able to make decisions about organ donation, life support, long term care facilities, and pain relief. You will want to be as specific as possible about the rights you are giving as well as your preferences.
Durable Financial Powers of Attorney allow you to appoint someone to make decisions regarding your finances. As with healthcare, your agent should be someone you can trust with your finances, but they do not need to be a CPA. Your agent will be able to make decisions regarding Social Security and Medicare, banking and retirement accounts, property, and everyday expenses. As with the healthcare power of attorney, take time to be specific.
If you’re wondering why healthcare and financial powers of attorney can’t be combined, technically, they can. However, if you are appointing the same agent in both documents, it isn’t recommended. A durable power of attorney will likely need to be presented to a financial institution or medical provider to prove authority, which could mean releasing sensitive financial information to a medical provider, or vice versa, if the documents are combined. Additionally, you will probably need to update your powers of attorney at varying times, which is done more easily if financial and healthcare matters are separated.
Giving someone authority on your behalf is a big decision that should never be trusted to an online form or someone not educated in your specific situation. What little money you might save could cost much more in time, money, and unnecessary pain down the road. Call Scott M. Schweiger today and do it right the first time.