People approach estate planning with different priorities. For example, those with young children or financially dependent spouses often want to ensure their loved ones will be taken care of after they pass away. Those who care deeply about their faith, a school, or an organization may wish to include a charitable donation or establish a scholarship fund in their estate planning documents. Additionally, those with personal medical challenges or those who have witnessed a loved one struggling with a chronic health issue may feel strongly about planning for incapacity.
Powers of Attorney are perhaps the most important documents for those worried about future medical or financial challenges during their lifetime. Below are three primary reasons why people add Powers of Attorney to their estate plans.
1. They have financial responsibilities and assets they need to protect
A person who is hospitalized for months because of a medical emergency would be unable to pay their bills, including their mortgage. Eventually, lenders may engage in collection activity, including foreclosure, which could ultimately deprive someone of their most valuable resources. Powers of Attorney are useful for those who do not have a joint owner or authorized user on their financial accounts and obligations. They can also be useful for those with a business that may require management if they have a personal emergency.
2. They have unique medical needs
People often have strong preferences about medical care. For some people, there is a religious reason for their medical preferences; others may have health issues that leave them unwilling to undergo heroic interventions after an emergency. Powers of Attorney and Advance Health Care Directives are a common inclusion in estate plans for those who want control over the care they receive.
3. They worry about their decline in the future
Someone experiencing cognitive decline may no longer be able to manage their own resources. Family members or even caregivers may seek control over someone’s day-to-day life and finances by petitioning a court and requesting to be appointed as the Guardian of the Estate and/or Person. The creation of a Power of Attorney allows an individual to name their own agent to act on their behalf. The agent can fulfill the role of a guardian without having to petition the court.
Estate planning documents provide the protection of a person’s wishes and comfort for the people they love. Preparing a Power of Attorney can benefit both the drafter and the appointed agent.