A power of attorney (POA) allows an individual to appoint another person to act on their behalf to administer their affairs in the event this individual becomes incapacitated. A power of attorney works when an individual is no longer mentally capable of taking care of their personal, legal, and financial affairs.
Individuals create power of attorneys for various areas of their lives to protect themselves and their loved ones in the event they can no longer make decisions for themselves. It would be difficult for a family member to try and guess how you would like your medical and financial matters to be handled if you become incapacitated, which puts a lot of stress on their shoulders. Instead, a POA can be established, so everyone can be prepared for the future.
Main Reasons to Obtain a Power of Attorney
There are many reasons why you might establish a power of attorney, which are:
- To make medical decisions on behalf of the principal (healthcare power of attorney)
- Handle financial and legal matters on behalf of the principal (financial power of attorney)
- Make decisions on behalf of someone who lost their mental capacity
- Determine who will take care of your children
Benefits of Different Types of Power of Attorney Agreements
A healthcare power of attorney gives an individual the authority to make medical decisions for you in the event you cannot do so yourself. This could be because you are mentally incapable of doing so or are unable to communicate with medical staff. This power of attorney covers medical preferences, end of life care, and whether you would like to be resuscitated in the event you stop breathing. Once you regain the ability to make and communicate on your own, you will be able to make decisions for yourself again.
A financial power of attorney can be used for one or even all financial transactions that an individual typically makes.
It is important to have a financial power of attorney as part of your estate plan. It will give you peace of mind to know that someone will handle your financial matters in the event you become incapacitated. If you do not take this step, one of your loved ones will need to petition the court to appoint a guardian or conservator of your property, which is time-consuming and expensive.
A power of attorney can be used for multiple reasons, including to sign contracts, pay bills, buy and sell property or stocks, manage real estate, and take care of finances. It is important to note that you will not need a power of attorney if you are no longer physical able to do certain tasks. If you are confined to a wheelchair or bed-ridden, but your mental capacity is intact, you can still make decisions for yourself. However, if you have dementia, you will need to establish a power of attorney immediately to be cautious.
If you need help creating a POA, contact our office online or give us a call at (512) 768-9737 to discuss your options.