Estate planning is all about preparation. In it, you make decisions and create the documents necessary to ensure your family is taken care of after you die. Part of an estate plan, however, also involves planning for what might happen before your death. Should you become unable to make decisions while you are alive, you want to give your family a guide as to how you want things handled. Using the power of attorney documents is one way to accomplish this. Discover more about what a power of attorney can and cannot do.
How a Power of Attorney Works
When something happens, and you can no longer make decisions, someone you appoint should make them for you. A power of attorney transfers your decision making to another person who makes financial or medical decisions on your behalf. A financial power of attorney has full access to your accounts. A medical power of attorney ensures that your end of life wishes are fulfilled. This person is usually a family member. If you are married, your spouse automatically assumes the role unless you indicate otherwise in your estate planning documents. It is not uncommon for a spouse to have power of attorney over one thing but not another. When you become unavailable, either physically or mentally, the appointed power of attorney takes over.
A Limited Power of Attorney
There are some situations where you are not available to attend a specific event that requires your signature. For example, if you are purchasing a home, but unable to be there in person to sign, you may appoint a limited power of attorney to act in your place. Once the documents are signed, a power of attorney is automatically rescinded. This also works in the event of surgery or temporary incapacitation.
A Durable Power of Attorney
Some situations may require a power of attorney to step in before you become incapacitated. A durable power of attorney activates when you are considered to be unable to care for yourself properly or make decisions. This may be due to a sudden accident or injury, or it may be a longstanding condition that causes your mental capacity to diminish. This power of attorney remains in effect after you become incapacitated and continues to your death.