Understanding Powers of Attorney: Financial and Medical

Knowledge is power—especially when making important decisions about your health and finances!

What Is a Power of Attorney?

A power of attorney is a legal document that allows you to appoint someone (an “agent” or “attorney-in-fact”) to act on your behalf in specific matters. This appointment can be tailored to suit your needs and activated immediately or only in the event of incapacitation. There are two main types of powers of attorney: financial and medical, each serving a unique purpose.

Financial Power of Attorney

A financial power of attorney allows your designated agent to manage your financial affairs.

This can include a wide range of responsibilities:

• Paying Bills: Ensures your bills are timely, preventing late fees or service interruptions.
• Managing Investments: Your agent can make investment decisions based on your goals and risk tolerance.
• Filing Taxes: An agent can prepare and file your tax returns, ensuring compliance with tax laws.
• Real Estate Transactions: They can buy, sell, or manage property on your behalf.

Why Is It Important?

In a medical emergency or if you cannot manage your finances due to illness or incapacity, a financial POA ensures that someone you trust can step in and take care of your monetary responsibilities. This proactive step helps prevent financial chaos during difficult times and protects your assets.

Key Considerations:

• General vs. Limited POA: A general POA gives broad authority over financial matters, while a limited POA restricts the agent’s powers to specific tasks or time frames.
• Durable vs. Non-Durable: A durable financial POA remains in effect if you become incapacitated, while a non-durable POA ceases to be effective upon your incapacity.

Medical Power of Attorney

A medical power of attorney (a healthcare proxy or agent) allows your appointed agent to make healthcare decisions if you become incapacitated. 

This encompasses:

• Treatment Decisions: Your agent can choose medical treatments, medications, and procedures.
• End-of-Life Care: They can ensure that your wishes regarding life-sustaining treatments and palliative care are honored.
• Access to Medical Records: Your agent will have access to your medical information to make informed decisions about your care.

Why Is It Important?

In moments of crisis, having someone you trust to make healthcare decisions can provide significant peace of mind. A medical POA ensures your values and wishes are respected even when you cannot communicate them yourself.

Key Considerations:

• Specific Healthcare Wishes: In some states, you can include explicit healthcare instructions in your medical POA, guiding your agent on your preferences in certain situations.
• Communication Is Key: Discuss your medical wishes with your agent to ensure they are prepared to act in your best interest.

The Importance of Communication

Open and honest discussions with the person you choose as your agent are crucial. Ensure they understand your values, wishes, and specific instructions regarding financial and medical decisions. This clarity can help avoid conflicts and confusion during challenging times and ensure your preferences are honored.

Final Thoughts

Understanding powers of attorney is a critical aspect of personal and financial planning. By taking the time to establish both financial and medical POAs, you can protect your interests and ensure that your wishes are followed when you cannot advocate for yourself.

Now that you have the essential knowledge about powers of attorney, please don’t wait until it’s too late! Empower yourself and your loved ones by creating these important documents today.

If you have questions or need assistance drafting your powers of attorney, contact us at wesbrookslaw.com/contact-us/ or call (602) 262-4357. Your future self will thank you!