Estate planning isn’t just about what happens when you die. It is also about the support you need if you get hurt or have a serious medical event. Car crashes, strokes or even a heart attack might leave someone incapacitated or in a coma.
When you can’t speak for yourself, you are extremely vulnerable. Drafting a power of attorney (POA) or possibly multiple powers of attorney when you estate plan protects you from this worst-case scenario. You can achieve many things with POA documents.
Whether you create one document or multiple different powers of attorney, you can achieve any or all of the three goals below with proper preparation.
1) Assign someone to address your medical needs
Medical privacy laws protect you, but they can also make it harder for the people you love to assist you during a medical emergency. You will need to have paperwork already in place at the time of your incapacitation if you want someone to handle medical matters on your behalf. Your power of attorney can authorize someone to make medical decisions. You may want to combine it with an advance medical directive that explains your various medical preferences.
2) Empower someone to handle your finances
If you are unconscious and hospitalized, you can’t pay your mortgage. The more financial assets and property you have, the greater the risk. A financial power of attorney can authorize someone else to access your bank accounts and pay your bills. You can even use a financial power of attorney to arrange for the management of your business during your incapacitation.
3) Choose your own guardian in the event that you need one
Sometimes, people neither die nor recover fully after an incapacitating injury or medical event. After a stroke or traumatic brain injury, for example, an individual may permanently lose their testamentary capacity.
Provided that you use the right wording to ensure it is durable, your power of attorney can serve as a means of empowering someone that you know and trust to provide for your care in the future. Otherwise, your power of attorney may lose effect when the courts declare you permanently incapacitated. Someone you don’t trust could end up serving as your guardian if you don’t act in your own best interests.
Understanding what you can do with a power of attorney can help you decide if you need one in your estate plan.