You probably never thought twice about having insurance to cover anything happening to your home or the family SUV. It should be the same with durable powers of attorney (POA).
There are two types of POAs. What are they, and what kind of benefits do they provide?
About durable powers of attorney
A power of attorney enables the person you appoint as your agent to manage certain healthcare and financial responsibilities on your behalf. A durable POA becomes effective as soon as you sign it. Your agent will maintain the authority to make decisions about matters defined in the document whether or not you ever become incapacitated.
POA for healthcare
This POA gives authority to your agent to make decisions concerning many aspects of your healthcare from the doctors you see to your hospitalization, surgery and home care. Your agent can also take responsibility for your living arrangements.
POA for finances
The financial POA usually goes hand-in-hand with the healthcare POA. If you should be unable to manage your own financial affairs, the agent for this durable POA will take care of your day-to-day finances, pay your bills, file your taxes, make investments for you and even manage the properties you own, if applicable. He or she will also take responsibility for approving your healthcare expenses.
The proactive approach
A serious accident or illness can happen to anyone at any age, so you should not delay in creating your durable powers of attorney. This is especially important for older people who might eventually face some form of cognitive impairment. As the principal, you must establish and sign your POAs and appoint your agent while you are mentally competent and able to do so.