A power of attorney is a document that gives someone else the authority to take care of decisions or transactions that you would typically take care of yourself.
These documents usually are meant to go into effect should the person who initiated them become incapacitated due to illness or incapacity; often due to age.
Each power of attorney document is specific regarding what the representative is and is not allowed to do. Moreover, any power of attorney can be revoked, or made null, at any time by the person who created it.
The two most common types of powers of attorney are financial and healthcare.
Healthcare Power of Attorney
A healthcare power of attorney permits an individual to make medical decisions for you.
If you are unconscious or in some way unable to make a decision, it is up to that individual to either follow the directions you have stated you want in a given situation or to make the decision they believe you would make.
For example, if you are in an accident and need emergency surgery, it is the person you have entrusted with your healthcare power of attorney who will tell the doctors if it is okay to proceed.
If you do not have a living will, this same person will have the power to decide if you are to be kept on life support or taken off should you fall into a coma.
As you can see, it is imperative that this person not only knows and understands your wishes but can be fully trusted to carry out those wishes, even if they do not think the choice is wise.
Financial Power of Attorney
A financial power of attorney gives a chosen individual the authority to carry out transactions relating to your money and other aspects of your finances.
This document usually is highly personalized. You may want someone who can work with your taxes and monthly bills, but you do not necessarily want that person to be able to do things like sell your home or make investment decisions. For these reasons, it is critical to lay out guidelines, or duties, you would assign to your financial power of attorney.
Duties that someone who you name in your financial power of attorney document may include things like communicating with your bank, making deposits and withdrawals, paying monthly bills, selling or buying real estate or your car, purchasing insurance, making investments and hiring an accountant. Generally, anything that involves your money and other assets can be included in the scope you choose to layout for this type of power of attorney.
Can One Person Carry Out Both Duties?
There is no legal reason one person cannot be named as holding both healthcare and financial power of attorney.
Both POA’s need to be assigned to people you can fully trust to handle your wishes and not misuse the power. You will need to ask yourself some critical questions, however, because the duties and responsibilities of each document are so different.
1. Is all this responsibility too much for one person? After all, whoever is chosen to carry out the duties in each document also has a life of their own that needs to be considered.
2. Does the person you want to assign the responsibilities of one power of attorney qualify for the duties of the other? For example, you may trust your very life to the person you name in your medical power of attorney, but is that person financially responsible enough for you to entrust with your money matters?
3. Is there any one person who is willing to take on the responsibilities of both types of power of attorney?
Naming someone in either one of these documents gives them a great deal of both power and responsibility for your health and your assets. The process of choosing either representative should not be taken lightly. If you are lucky enough to have one person in your life who you feel confident can handle the responsibilities of both documents, then there is no reason not to let them handle the duties. In most cases, however, it is advisable to find two different people, each handling different scenarios.
If you have questions, we have answers.
Here at Lilac City Law, our experienced representatives have spent many hours helping people with the same questions that you may have.
At the same time, we realize that the situation of each person is different. Contact us if you have questions, and someone will sit down with you and try to answer all your questions in a way that allows you to take charge of your estate planning goals. Call us today.