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It is best not to delay creating your powers of attorney

| Dec 28, 2020 | Estate Planning

Perhaps you are nearing retirement and have been thinking about creating an estate plan.

Aside from your will, the first documents you want to create are powers of attorney for both health care and finances, and it is best not to delay getting this done.

About the POA for healthcare

The person you designate can step in to make medical decisions on your behalf if you become incapacitated and are unable to do so yourself. The agent, as this person is called, can make decisions about your long-term care, end-of-life care, Medicaid planning and more.

The matching POA for finances

You can name the same person or a different person as your agent for making legal and financial decisions in your stead. Older people who are still competent sometimes establish a financial POA when they need additional help with certain activities such as paying bills or managing their social security benefits.

The springing POA

There are two forms of POA documents: active and inactive. A durable POA becomes active the moment the principal signs it, allowing the agent the authority to make decisions immediately. A springing POA only goes into effect when the principal becomes incapacitated. However, the POA must specify the kind of event that activates the agent’s ability to act.

Advance preparation

Some families wait too long to create POAs. You are wise to consider establishing powers of attorney for health care and finances well in advance of any issues, such as the onset of dementia. The POAs are only legal as long as the principal is mentally competent when signing them.