If you are planning to draft your will, you may also be thinking about the benefits of other estate planning documents, such as powers of attorney.
Financial and medical powers of attorney (POAs) will help immeasurably if you should become disabled. Here is what these estate planning tools can and cannot do.
POA for medical care
Also called a healthcare power of attorney, this POA gives your agent the ability to make medical decisions on your behalf if you should become incapacitated. These decisions might include the choice of doctors to treat you, hospital care, surgery or home health care. Other decisions may include whether you need care in a nursing home or can afford to remain in your own home.
POA for finances
The financial power of attorney often goes hand-in-hand with the healthcare POA. On your behalf, your agent can collect debts, pay your bills, file your taxes and make investment decisions. The agent can also manage your property and apply for public benefits, such as Social Security, Medicaid or veterans’ benefits.
A power of attorney gives your agent significant control in making medical or financial decisions on your behalf. In order to ensure that he or she is acting in your best interests, the agent cannot:
- Make changes to your will
- Break his or her fiduciary duty
- Make decisions on your behalf after your death
- Change a POA or transfer the POA to someone else
If you are considering including POAs among your estate planning tools, your attorney can provide more insight into what these documents can and cannot do.