When you start planning your estate, one of the first things many people do is write up their will. This legal document can help detail how your assets will be distributed to beneficiaries after you die. A will isn’t just about asset distribution but could decide the fate of your health and finances while you’re still living.
When writing a will, you may have to decide on powers of attorney. A power of attorney will make large decisions on your behalf if you’re unable to physically or mentally speak for yourself. There are two types of power of attorney – and here’s what you should know.
What is a Power of Attorney (POA)?
A Power of Attorney is a legal document that grants authority to a designated person (the agent or attorney-in-fact) to make decisions on behalf of the individual (the principal) in specific situations. The agent can act on the principal’s behalf for financial or medical matters, depending on the type of POA.
Financial powers of attorney
Your power of attorney may step in if you’re incapable of handling your own affairs by accessing your accounts and paying your rent, utility bills or other debts. Although you can give someone your financial power of attorney to handle business for you (like if you’re overseas) while you’re still capable of making your own decisions, most financial POAs “spring” into action only once you’re incapacitated.
Anyone over 18 years of age can be a financial power of attorney, but that doesn’t mean just anyone should be. A financial power of attorney may be someone you can trust who can handle financial responsibilities.
Medical powers of attorney
The person with your medical power of attorney may oversee your medical decisions on your behalf. Unlike a financial power of attorney, a medical power of attorney is only active temporarily during times when you’re no longer able to make decisions regarding medical treatment.
Again, anyone over 18 years of age can be a medical power of attorney. Keep in mind, however, that your medical power of attorney may need to make hard decisions on your behalf – and not everyone is equipt for the job.
Can I have both a Financial and a Medical Power of Attorney?
Yes, absolutely. It is common for individuals to have both a Financial Power of Attorney and a Medical Power of Attorney. These two documents ensure comprehensive coverage for various situations, empowering trusted individuals to manage different aspects of your life.
Can I appoint the same person as my agent for both Financial and Medical Powers of Attorney?
Yes, it’s possible to appoint the same person as your agent for both types of Powers of Attorney. However, keep in mind that handling financial matters and making healthcare decisions require different skills and responsibilities. So make sure your chosen agent is comfortable and capable of handling these distinct roles.
When does a Power of Attorney go into effect?
A Power of Attorney can go into effect immediately upon signing or it may become effective only when you become incapacitated or unable to make decisions. The choice depends on your preferences and the specific language used in the document.
Is a Power of Attorney valid across state lines?
A Power of Attorney’s validity across state lines depends on the specific laws of each state. While many states have reciprocity and recognize out-of-state POAs, it’s wise to consult with a legal professional to ensure your document complies with the laws of the state where you reside or where the document will be used.
Can I modify a Power of Attorney after it’s been executed?
Yes, it is possible to modify a Power of Attorney after it has been executed. You can create an amendment or a new POA that supersedes the previous one. However, any changes typically must be executed and signed with the same formalities as the original document.
Remember, while this information provides an overview of Financial and Medical Powers of Attorney, it is essential to consult with a qualified legal professional to create personalized and legally sound documents that meet your specific needs and requirements.
If you’re planning your estate, you may need to reach out for legal help when deciding how your health and finances will be overseen.