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The two main powers of attorney

On Behalf of | Dec 15, 2022 | Estate Planning |

When you’re making an estate plan, you can use a power of attorney to give someone else the ability to act on your behalf. This happens before you pass away, but after you become incapacitated. For example, someone who has been diagnosed with a degenerative brain disease may make a power of attorney because they know that, even if it is years or decades in the future, they may struggle making their own decisions with a sound mind.

There are two types of powers of attorney that you can consider, which are noted below.

A health care power of attorney

First and foremost, many people use a healthcare power of attorney to select their agent. The agent then is given the ability to make healthcare decisions and medical choices on behalf of the patient. This is similar to using an advanced directive, which informs the medical team about the various treatments that you want. But it can be a bit better, because your agent has more flexibility to make decisions in real time. They can decide what treatments you want, what types of treatments you don’t want, what drugs and medication to use and much more.

A legal power of attorney

Next, people use a legal power of attorney. This is sometimes referred to as a financial power of attorney. It essentially just deals with other decisions that you may have to make regarding things like transferring property, paying taxes, accessing bank accounts and the like. A legal power of attorney gives your agent the ability to take care of your affairs and help you with the things that you may not necessarily be able to do on your own.

How broad are these powers?

You can determine how far-reaching you want your agent’s abilities to be. They could be allowed to make medical decisions in a very specific situation, for instance, or they could have broad abilities to make all medical choices and work closely with your medical team.

You can also choose the same person for both the legal and financial side, or you can select different people, if you would like. Just make sure you know about all of the legal options you have.