Planning for the possibility of incapacity is an essential part of comprehensive estate planning. One of the most effective ways to protect your financial and healthcare decisions is by establishing a power of attorney (POA). This legal document enables a trusted agent to manage your affairs if you become unable to do so.
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What Are the Different Forms of a Power of Attorney?
There are several types of power of attorney, each suited for specific needs:
| Type | Description |
|---|---|
| General POA | Grants broad powers to handle financial and legal matters. |
| Limited POA | Restricts the agent’s authority to specific tasks or assets. |
| Durable POA | Remains valid if the principal becomes incapacitated. |
| Springing POA | Becomes effective only upon a doctor’s confirmation of incapacity. |
| Medical POA | Allows an agent to make healthcare decisions and is always durable. |
Each type must comply with your state’s laws. As of 2019, 26 states follow the Uniform Power of Attorney Act, providing more standardized protections. If you reside or travel in multiple states, consider creating POAs valid in each state.
What to Consider When Appointing a Power of Attorney
Choosing the right agent is vital. Here are a few considerations:
- Are your adult children or relatives trustworthy and capable?
- Is the person geographically close enough to act promptly?
- Do you have a backup agent in case your primary agent is unavailable?
- Is the person willing and able to follow your wishes exactly?
Always make these decisions while you are in good physical and mental health. A qualified estate planning attorney can help you evaluate the best candidates and ensure your documents are legally sound.
What Role Does a Financial Power of Attorney Play?
A financial POA can be granted broad or limited authority to manage financial matters, including:
- Paying everyday expenses
- Managing real estate transactions
- Handling government benefits (e.g., Medicare, Social Security)
- Investing funds
- Dealing with banks and financial institutions
- Buying or selling insurance policies
- Filing and paying taxes
- Running your small business
- Claiming inheritances
- Transferring property to trusts
- Hiring legal representation
- Managing retirement accounts
The agent must act in your best interest, maintain accurate records, and avoid conflicts of interest.
What Role Does a Medical Power of Attorney Play?
A medical POA designates someone to make healthcare decisions if you’re unable to. It typically includes your treatment preferences and is often combined with a living will into a single document called an advance healthcare directive.
Your agent should be:
- Trustworthy and emotionally stable
- Willing to advocate on your behalf
- Knowledgeable about your preferences for life-sustaining treatments
Proper documentation ensures that your agent and healthcare providers comply with your expressed medical wishes.
Contact Us for Help With Your Power of Attorney
Establishing a power of attorney offers peace of mind and helps avoid expensive, time-consuming guardianship proceedings. A skilled elder law attorney can help tailor your documents to meet your specific needs.
We hope you found this article helpful. If you’d like to discuss your specific situation, please contact us or call 501-834-2070 to schedule a consultation. We have offices conveniently located in Sherwood, Searcy, Benton and Little Rock.