Durable power of attorney is used to authorize a person to legally make decisions on your behalf about finances and health care. The ‘durable’ part keeps the powers in place until death; allowing the attorney-in-fact to carry out duties such as paying bills, making deposits, filing tax returns, or obtaining medical records.
Without a durable power of attorney, relatives won’t be able to have any input regarding medical or financial decisions. In order to manage affairs they have to go to court to appoint a person as the attorney-in-fact and obtain permission to act on your behalf. Not only is this inconvenient, it adds to existing burdens of coping with the crisis at hand. This can be averted by setting up financial and medical POA forms.
The simplest way to execute these documents is by hiring a lawyer. Other options include utilizing legal service providers like LegalZoom or purchasing do-it-yourself kits via the Internet or office supply stores.
A financial POA is advisable for everyone that has any kind of personal finance matters. This document grants permission to the designated attorney-in-fact to pay bills; make deposits into bank accounts, financial portfolios, and retirement accounts; file tax returns; and engage in specific transactions documented in the POA form.
Medical power of attorney forms let people state what kind of health care procedures they do or do not want to receive if a life-threatening event occurs. Some states require people to execute a living will in lieu of medical POA, so it’s best to obtain legal counsel to determine appropriate forms.
Healthcare directives should include a consent form to release medical records to the attorney-in-fact. Confidentiality laws prohibit medical personnel from releasing personal health information to others without proper consent.
For most people, the logical choice for attorney-in-fact is family members. It’s important to realize that the person chosen will have access to sensitive financial and medical information, so it’s crucial to choose wisely. In lieu of relatives, attorney-in-fact can also be financial planners, attorneys, or a personal friend.
In most situations it is advisable to designate one attorney-in-fact for both financial and medical durable power of attorney. While not mandatory, having one person in charge can be more efficient. If this isn’t feasible, it’s best to designate two people that are capable of working well together.
Establishing POA is also an important estate planning strategy. One of the most valuable gifts anyone can provide to their family is making certain their affairs are in order. Settling loved ones estate can be a complicated issue if directives aren’t provided in a last will and testament.
Writing a Will helps to expedite the probate process which is used in the U.S. to settle decedent estates. Wills are needed to ensure that loved ones receive the inheritance property you want them to have. They also are used to establish guardianship for minor children and appoint a personal representative to manage estate matters.
Both Wills and durable power of attorney forms grant authority to those charged with specific duties and helps make their job easier. For a nominal fee and a few hours of time, these documents provide peace of mind knowing that everything is in order should the unthinkable occur.