Estate planning plays a critical aspect in your personal finances and relationships. A key component of estate planning is creating a durable power of attorney.
What is a durable power of attorney?
As you age, you become more likely to experience an illness or injury that could render you unable to make your own decisions. A durable power of attorney (DPOA) is a legal document that gives someone else the authority to make decisions on your behalf if you become incapacitated. Just like wills, trusts and other estate planning essentials, DPOAs are an important part of financial planning for your future.
What are the main roles of the Durable Power of Attorney?
There are two main roles of the DPOA: financial power of attorney and medical power of attorney.
The financial power of attorney gives the designated individual authority to manage your finances if you become incapacitated. This includes paying bills, managing investments and even selling property on your behalf.
The medical power of attorney gives the designated individual the ability to make decisions about your medical care if you become incapacitated. This includes deciding what treatments you should receive, consenting to or refusing surgery and even making end-of-life decisions. You can name the same person for both roles or two different people.
Besides ensuring that your finances and medical care are managed according to your wishes, DPOAs can also be a helpful tool to avoid family conflict in the event that you become incapacitated. If you don’t have a durable power of attorney and something happens to you, your family may need to go to court to get someone appointed as your legal guardian. The guardianship process can be expensive, time-consuming and emotionally draining. A durable power of attorney can alleviate some of this stress for family members.
