As you age, thinking about planning for the future is critical if you have not already done so. Understanding the importance of being prepared for what could happen later in life and the unexpected that could happen even now is essential.
WHAT IS A POWER OF ATTORNEY?
A power of attorney is one legal document that should be part of your estate planning. In this legal document, you designate a person to manage your affairs and make decisions on your behalf if you are in a situation where you cannot.
The areas that a power of attorney can cover include:
- Finances
- Legal issues
- Medical care
- Business matters
- Specific tasks
One of the most common situations where someone would benefit from having a power of attorney is if the individual becomes incapacitated.
BENEFITS OF HAVING A POWER OF ATTORNEY
No one expects to suffer a stroke, for example, in their forties or fifties. Still, it happens, and in these cases, having someone who can take over your matters and help you manage your affairs until you recover can be crucial.
There are several different types of powers of attorney, including:
- Financial power of attorney
- Medical power of attorney
- Durable power of attorney
- Limited power of attorney
All of these aim to do the same thing: give authority to another person to make decisions for the person who created the power of attorney, in whatever aspect they request them to do so, which is how the above powers of attorney vary.
This means that the creator of the power of attorney chooses what they want their designated person to have power over, and what they do not want them to have authority over.
For example, suppose a person wants to designate another person to handle their financial matters only and states that clearly in the document. In that case, they will not have the same privileges when making decisions about their health.
Powers of attorney are essential in anyone’s estate planning toolbox. It ensures you are protected and that your wishes are respected if you cannot make decisions for yourself.
