When creating an estate plan, a power of attorney is a document that you can use to choose an agent who will act on your behalf. Although these can be used for many different purposes, they are often used either for medical reasons or for financial/legal reasons.
In both senses, a power of attorney is important because it gives the other person the legal authorization that they need to take these important steps. Without it, it can be complicated to figure out who gets to make medical decisions or access bank accounts when the person themselves has been incapacitated – by an injury, an illness or just the effects of aging. With a power of attorney in place first, that person is given the chance to choose their agent who will then take over if it is necessary.
Taking action when needed
If you draft a medical power of attorney, it allows the agent to work with your doctors to make decisions about the type of care that you want or the care that you do not want. They may decide what medication you’ll take, if you’ll be resuscitated, if you should be kept on life-support and things of this nature.
With a financial power of attorney, the person will be able to take other important steps on your behalf, such as accessing your bank accounts to pay medical bills, pay taxes and more.
In both cases, this does not mean signing over your rights to make these decisions when you draft the document. You could write and file a power of attorney today, for instance, but that agent still doesn’t take over and make your decisions until that type of action is necessary – usually when you become incapacitated. It is important to make sure you get all of the details right, so carefully consider your legal options.
