Do you know what an estate plan is? If you’re unaware, then you should know that an estate plan includes a will, which details your last wishes: how your assets are distributed and funeral arrangements. In addition, your will should include an executor of your estate to help maintain and distribute your assets to your heirs.
This may sound a lot like work you should decide when you get older, and you aren’t entirely wrong. However, you should be aware that an estate plan also includes a power of attorney who may be important to you while you’re still alive. You may be wondering, what is a power of attorney?
Here’s what you should know:
Designating a power of attorney
A power of attorney is a representative who will make decisions on your behalf. They don’t make decisions at any given moment, instead, you likely have to be incapacitated before your power of attorney goes into effect. This may happen after you were in a car accident and become unconscious, if you develop a medical condition that makes you unresponsive or any other situation which results in you being unable to make decisions for yourself.
A power of attorney has control over your financial and medical decisions. This means they’ll be able to pay off debt, rent or utilities. Likewise, they’ll decide if you undergo surgery, medication, medical evaluation or therapy while keeping your best interests in mind.
As such, you can designate two people to act as your medical or financial power of attorney. People, typically, designate one person to take control over both medical and financial decisions under a general power of attorney.
There are several kinds of power of attorney that decide when and how they make decisions on your behalf. Many people seek legal help to ensure they’re making the right choice for their estate plan.