Estate plans serve several different purposes and can include several different types of documents. Powers of attorney are important to include in an estate plan and estate planners should know why.
Types of powers of attorney
Power of attorney documents can help with both financial affairs and medical care. They can be an important part of what is considered incapacity planning for if the estate planner becomes incapacitated at any point and cannot manage their financial or medical affairs for themselves.
Powers of attorney can be tailored to cover a wide variety of situations, or they can be made more narrow in scope. For instance, a power of attorney for financial affairs designates a trusted agent to make financial decisions for the estate planner. It also allows them to direct the estate planner’s financial affairs. Likewise, a power of attorney for medical care designates a trusted agent to make medical care decisions for the estate planner. It also allows them to direct the medical care for the estate planner.
Another type of document can cover both financial and medical issues. A financial and medical powers of attorney will allow the named agent to manage the daily financial affairs and direct the medical care of the estate planner. Powers of attorney are used largely to help estate planners prepare for situations when they are incapacitated and cannot manage their financial or medical affairs.
When selecting an agent for the power of attorney, the estate planner should consider selecting someone they trust. They may want to select a family member. They should also consider naming a successor agent just in case. Estate planning is an important process for everyone to familiarize themselves with which includes the importance of powers of attorney.