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What is a power of attorney?

On Behalf of | Sep 14, 2022 | Estate Administration & Probate |

When you create a will, you’ll likely be asked to detail your assets, assign your beneficiaries and designate an executor of your estate. You may also be asked to assign someone to be your power of attorney (POA).

Is this the first time you’ve heard about a power of attorney? Someone with your POA can make decisions on your behalf – but there’s more to a POA than that. Here’s what you should know:

Financial vs. Medical POA

You’ll have the choice to appoint a financial or medical power of attorney — and most people have both. Both your financial and medical POAs can play similar roles:

  • If you are suddenly incapacitated, your financial POA may make decisions regarding your money. That could mean paying rent, utilities, bills or collecting insurance benefits.
  • Your medical POA makes decisions for you if you are in an accident and need surgery but are unable to consent, are unconscious and need treatment and medication or no longer have the mental capacity to make your own health care decisions.

Both a financial and medical POA is active only for the time you’re unable to make decisions. You may, however, name a springing financial POA for a limited time to do things like make investments while you’re traveling or overseas. That could mean purchasing a home or business while you’re away, for example. Alternatively, you may decide that one person is fit for both financial and medical POA and assign them as a general POA.

If you’re planning your estate and need to know your options, it’s wise to get legal guidance. That’s the best way to make sure that you avoid challenges to your plans and challenges to your estate down the line.