A durable healthcare power of attorney (POA) together with a POA for finances is a smart choice for managing your medical and financial needs.
POAs are important items in your estate planning toolkit. How do they work and what are the benefits to you as the principal?
The healthcare POA
The POA for healthcare enables the person you name, your agent, to make decisions about medical care on your behalf. Your agent’s authority extends to the healthcare providers you use as well as decisions concerning hospital care, surgery and home healthcare. That authority also includes decisions regarding care at a nursing home or assisted living facility.
The POA for finances
The agent you appoint to manage your POA for finances should have access to your checking and savings accounts in order to receive income and pay bills on your behalf. Your agent can file your taxes, manage your property and make investment decisions for you. He or she can also work with the Social Security Administration and Medicaid on your behalf and manage your benefits if you are a veteran. If you are an older person but still competent, your agent can make your life a little easier by helping you manage your day-to-day finances such as balancing your checkbook.
The need to plan ahead
A major accident or illness can strike quickly, causing you to become incapacitated and unable to manage your own affairs. As you age, you also have to consider the possibility of some level of dementia. As the principal, you must be mentally competent to execute powers of attorney. Consequently, it is important to seek legal assistance and prepare your POA documents while you are still in good health.