When we think of estate planning, we tend to focus on what happens to our assets after death. We spend a lot of energy on wills and trusts, securing the future of our money and our family. This is a wise step to take, but we often forget how fragile we really are. We wake up every day, ready to execute our plans, forgetting that injury, age, or illness can halt our progress.
You should also plan for a time when you may be incapable of caring for yourself. This is often described as being “incapacitated,” having lost capability. When you cannot make your own decisions, you need a trusted individual to do so for you. The power for one adult to make decisions for another is called power of attorney. Different states sometimes use different terms for this power, but in general, there are two kinds: financial power of attorney and healthcare power of attorney.
Financial Power of Attorney
When you cannot make sound financial decisions, your financial power of attorney handles your estate. They can buy and sell property in your name. Real estate matters can fall under their jurisdiction. They can make investments for you, withdraw money, pay your bills, and so forth. If necessary, they can even file a lawsuit on your behalf or represent you if you are sued.
Healthcare Power of Attorney
This person makes decisions regarding your medical care. They can manage your doctor visits, consulting with physicians and asking questions about your treatment. They can approve or deny prescriptions, and they can make choices regarding surgeries and long-term care. If the time comes, they can make decisions about extending or canceling life support.
Limiting Power
Clearly, your power of attorney has a great deal of authority over you. Handing over that much power is a serious matter. This is why you should decide on limitations and caveats now.
When deciding on power of attorney, you can limit what powers are granted. For example, if you need final say on major real estate transactions, you can add that stipulation. If you want authority over any surgical procedures, you can include this requirement. Power of attorney can also be altered when it is in effect. You could begin regaining your faculties and need more say over your life.
You can also decide when and how these powers begin. For example, you stipulate that authority is transferred only if you become completely comatose. You can also make decisions on major concerns such as life support. You can choose now whether you wish to remain in a vegetative state.
Granting Power of Attorney
Choosing the right person to grant this authority is important. Remember that there are two separate powers of attorney to consider. You can choose different people for each role. You could grant both powers to one person. If necessary, you can grant one type of power to only one person and abandon the other altogether. The choice is yours.
When making these decisions, hire a skilled attorney to help. They can guide you on which decisions much be made and by whom. They can help you manage the paperwork, and oversee the documents, keeping them free from errors and ensuring legal clarity.
If feasible, you may also wish to hire a lawyer to watch over those who have power of attorney. An outside, impartial person may be able to spot instances of abuse. At the same time, your power of attorney can keep an eye on your legal counsel, helping keep everyone honest and working toward your best interests.
For help with estate planning and powers of attorney, contact our firm today. You can call us at (508) 206-9900 or contact us online.