Estate planning is no simple task. Planning out your future and figuring out how to care of yourself is an important task. The process is often complicated, confusing and difficult to navigate. The internet can be a great resource, but it can also be misleading. The many different components of estate planning may leave you with questions about what’s true and what’s not.
The concept of powers of attorney can be a particularly confusing part of your estate plan. Many people have misconceptions about this aspect of estate planning. Here are some of the most common misconceptions about powers of attorney and what’s really true about this estate planning component.
What Is A Power of Attorney?
A power of attorney is not a person, but a document that gives a person permission to make decisions on your behalf. This document grants a chosen representative legal authority to make certain types of decisions regarding your finances and/or health care.
Are Power of Attorney and Durable Power of Attorney The Same?
A durable power of attorney is different than a power of attorney. A DPOA has language in it that specifies that the decision-making power extends to the named person if you become incapacitated or otherwise unable to make decisions for yourself. This is an important distinction because a regular power of attorney will end if you become incapacitated. That means you will need both in place.
Do I Need More Than One Power of Attorney?
You may have read about multiple powers of attorney; however, some people think that a single power of attorney is all you need. This is not necessarily true. There are multiple powers of attorney and you may need more than one to be sure you are fully cared for.
The various powers of attorney include:
- Power of attorney for healthcare – this person can make medical decisions for you in an emergency such as confirming or denying medical treatments and deciding what medical facilities you should go to
- Power of attorney for finance – allows someone to manage your money and finances. This can include paying your bills and taxes and managing your real estate and other accounts.
Can The Agent In My Power of Attorney Do Whatever They Want?
Luckily, no. Your agent is legally obligated to make their decisions based on your best interests. You may also create specific directions for your power of attorney and the document simply gives them the legal authority to carry them out if you are unable to by yourself.
Creating these documents is an important part of estate planning and it is crucial to get it right. Working with an attorney during this process will help you ensure you are making the right moves and that your wishes are secure.