When you use a power of attorney, you’re picking an agent. This is another individual that you are authorizing to make your decisions. The power of attorney does not start right away, but the document sets things up so that that person assumes responsibility for these decisions in a situation where you cannot.
For instance, you might be worried that you won’t be able to make medical or financial decisions if you’re incapacitated. You can choose a power of attorney for either situation. What is the difference between the two?
A medical power of attorney
A medical power of attorney simply authorizes that person to work with your medical team. The doctors can suggest types of treatment, and your agent can decide whether or not you’re going to get them. You can also list out different types of treatment in an advance directive, but using a power of attorney means that you’re entrusting this person to make decisions in real-time. That gives them more flexibility.
A financial power of attorney
A financial power of attorney focuses on your estate and all the details that need to be considered. Every year, you do things like paying your property taxes or paying income taxes. You may also have to pay off credit card bills, access bank accounts and things of this nature. These are all things that no one is allowed to do but you, so the power of attorney gives someone else the ability to do this and handle your financial affairs when you can’t do so.
Both types of powers of attorney can be very helpful, so make sure you know what steps to take to set them up.