Getting an estate plan together is an important task for all adults, but it’s one that might be more involved than some people realize. Many individuals know that the estate plan should outline who should receive what assets when the creator passes away. Many don’t realize that a comprehensive estate plan should also include plans for if the creator becomes incapacitated.
One critical component of a comprehensive estate plan is setting up the power of attorney designations. Adults need one for their healthcare and one for their finances. It’s possible to have the same person handle both areas, but that’s not required.
What does a power of attorney do?
A power of attorney gives the person you name as the designee the right to make decisions on your behalf. Typically, this will go into effect if you become incapacitated, which means that you can’t make decisions on your own. The person who has the financial power of attorney can buy or sell assets and investments, pay your bills and take care of all financial matters that you’d normally handle.
The person who has healthcare power of attorney can make medical decisions for you. They work closely with your medical care team, and they must comply with your advanced directive document. The advanced directive is a written account of what types of care you want and what types you forbid.
Power of attorney designations are only part of what every adult should consider when they’re creating an estate plan. Working with someone who understands your wishes and can help you to relay those wishes in a lawful manner may be beneficial.