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What are the 2 types of power of attorney?

On Behalf of | Jun 11, 2024 | Wills And Estate Planning

Whether you are old enough to retire or young enough to begin your first career, you can benefit from two types of power of attorney (POA) documents.

A POA takes over when you are suddenly unable to manage your health care or financial responsibilities.

Power of attorney for health care

A serious accident or illness can happen to anyone regardless of age. A POA for health care and the appointment of a health care representative allows the person you select as your agent to make medical decisions on your behalf. This includes decisions concerning doctors, treatment options, hospital care, surgery and professional home care as well as the fulfillment of your end-of-life wishes.

Power of attorney for finances

A POA for finances often accompanies the health care POA. If you become incapacitated, your agent can step in and manage your legal affairs, pay your bills, file your taxes, make investment decisions and even apply for benefits, such as Medicaid, on your behalf. Having this type of POA is also beneficial for older people who just need day-to-day financial help, such as writing checks and balancing the checkbook.

Choice of agent

Think carefully about the person you want to act as your agent. You can name one person for both the health care and financial POAs or a different person for each one. Also, the older you are the more important it is to avoid delay in creating your POAs. Many seniors develop some form of dementia, and in order for POAs to be legal, the principal must be mentally competent when establishing and signing these documents.

Once set up, these important estate planning tools will give you and your family peace of mind.