We all believe that we are invincible and will pass peacefully in our sleep at a ripe old age. What if that plan is interrupted by an unexpected medical event or accident? What if our mind fades out before our body does? How can you be ready to receive aid when you cannot aid yourself? It is through Powers of Attorney. There are two types of Powers of Attorney that we rely upon: Durable or Financial Attorney and Healthcare Power of Attorney that goes hand in hand with a Living Will.
Durable or Financial Power of Attorney is a document that is prepared while you are cognitively and physically fit to create it that determines who you wish to make decisions about and manage your finances if you cannot. This is generally a spouse and maybe an adult child as a back up. The person you have chosen can only act on your behalf and take control of your financial assets if you are temporarily or permanently unable to do so. The person you choose as your financial Power of Attorney can do everything you can do regarding your assets and accounts. You can limit the access by adding or removing certain powers. The financial institutions will want to review your Power of Attorney prior to allowing your chosen designee access to your assets. It will be beneficial to have that review made while you are competent to make changes to the document. You do not need to add your financial Power of Attorney to your accounts as an owner the document will provide your chosen representative access. It avoids potential ownership issues should the person you add to your account have issues that may allow access to your money or interfere with your other estate planning goals.
Healthcare Power of Attorney is a document in which you choose the representative who can make medical and other heath related decisions if you are temporarily or permanently unable to do so. This designee can make decisions up to and including ‘pulling the plug’. Their power is limited to those granted in the document. You can determine if additional family members should be consulted, what kinds of ‘heroic’ measures you want or don’t want, and if you want to grant the authority to ‘pull the plug’. The Healthcare Power of Attorney can also be used to allow the person chosen to make decisions on where you reside and the type of care that you need. This is based upon consultation with your medical team and only if you are cognitively or physically unable to do so. The Living Will is a document that you create that states your wishes should you not be able to make the decisions yourself. The difference between the Power of Attorney and the Living Will is that the Living Will does not designate a person with authority to make decisions but only serves as your written instructions to your medical providers if you are unable to state your wishes.
If you choose not to use the Powers of Attorney and you become mentally or physically unable to handle your financial or medical decisions then an individual must apply to the Probate Court to be appointed as Guardian of your person or your finances (estate). The Court will then oversee that individual regarding any medical or financial decision. This can slow down the healthcare decisions and will delay access to your assets for your care and wellbeing. Putting Powers of Attorney’s in place is a plan to make sure that you are taken care of by the person you choose not the person the Court chooses.