When discussing what two legal documents every adult needs, two documents come to mind: Financial Durable Power of Attorney and Health Care Power of Attorney. 

Regardless of your financial circumstances, these documents are critical for anyone who wants to protect their own well-being and spare their loved ones from likely pain and aggravation. If you are in an accident and you do not have these documents in place, a significant burden may be placed upon your family.

If something terrible happens and you are in the hospital and unable to communicate, the hospital will need someone else to make healthcare decisions on your behalf.  Deciding who will make such decisions, and the decisions themselves, can create an enormous family dispute among your loved ones as they attempt to determine what you would want to happen.

What Is a Health Care Power of Attorney?

A Health Care Power of Attorney allows you to name the person (your agent) that you want to make your health care decisions if you are unable to make those decisions yourself. It also allows you to let your agent know how you want your health care decisions to be made.

The Health Insurance Portability and Accountability Act (HIPAA) strictly protects who may access your medical records. A Health Care Power of Attorney will include the appropriate language to ensure that your appointed health care agent will be able to access your medical records to be better equipped to make an informed decision regarding your treatment.

Remember, if you are in an accident or some other ill fate befalls you, your family will already be scared and worried about you. A Health Care Power of Attorney will make it easier for your family to navigate the legal red tape and help them feel comforted in knowing that your health care decisions are being made in accordance with your wishes and beliefs.

What Is a Financial Durable Power of Attorney?

A Financial Durable Power of Attorney (often referred to simply as a Durable Power of Attorney) allows you to appoint a person (referred to as your agent) to make financial decisions on your behalf, access your financial records, and take appropriate action to handle your financial affairs.

If you become incapacitated, your loved ones may not access the appropriate assets and records to manage your financial affairs. Especially in the event of long-term incapacitation, it is crucial that you have appointed an agent to handle your finances.

The Durable Power of Attorney will allow your agent to use your assets to pay for the day-to-day expenses of you and your family, such as paying the mortgage or rent, utilities, medical bills, and so on. It will also allow your agent to collect, on your behalf, any income which you may be entitled to such as Social Security, disability insurance benefits, or other benefits.  

The Durable Power of Attorney will also allow your agent to file and pay your taxes, manage your stocks, bonds, retirement accounts, and so on. And, while your agent has broad powers, the agent is required to act in your best interests.

Man looking over finances

A Durable Power of Attorney can be drafted to be effective as soon as you sign it–this is commonly used by spouses so they may act on behalf of each other, for example, if one spouse is out of town. Alternatively, you may prefer to use a “springing” Durable Power of Attorney, meaning that it will not take effect until a doctor certifies that you are incapacitated.  

This creates a hurdle for your agent to obtain a doctor’s affidavit, but it can give you peace of mind if the idea of an immediately effective Durable Power of Attorney makes you uncomfortable.

Using a Durable Power of Attorney form from the internet is ill-advised.  Many, especially those of the “check the box” variety, are too generic and may not be honored by your bank or other financial institutions.  The internet document may not comport with the laws of your state of residence. In addition, it is important that the power of attorney contains the appropriate “durability” language.   Without such language, a power of attorney will be ineffective upon your incapacity–the exact situation we are trying to protect!

How Can We Help You?

If you do not have a proper Durable Power of Attorney in place and something happens to you, your family will be stuck with the frustrating, time-consuming and expensive process of having the court system appoint an agent on your behalf.  

The time to complete such a process can create financial hardship for your loved ones and may result in the appointment of an agent that you would not have selected for yourself.  Take the time now to make sure that you and your family are protected.

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