What is a Power of Attorney and Why Do I Need One?

When most people think of estate planning and getting their affairs in order, they will think of items such as Last Will and Testament, Trusts, and avoiding estate taxes. However, a key component of every estate plan is the three important disability legal documents. 

One of the very important disability legal documents that you should have in place is the power of attorney. Specifically, there are two types of power of attorney, a financial power of attorney and a health care power of attorney. The financial power of attorney, which is sometimes referred to as a durable general power of attorney. What this document does is that it allows a family member, or a close family friend, to have the power over you to make certain financial decisions should you be in a position where you are unable to make your financial decisions. These type of financial decisions include accessing bank accounts, buying and selling real estate, buying and selling other financial assets, and closing bank accounts. 

The other important power of attorney is called the health care power of attorney. This document is very similar to the durable financial power of attorney. However, this document only provides the trusted family member or close family friend the ability to access medical records, speak with doctors, and make important health care decisions. Just like the durable financial power of attorney, the trusted person of your choosing would be able to make these important health care decisions only when you are in a position where you are unable to make these important health care decisions in the future. For example, if you would be incapacitated from a terminal illness or serious accident these documents would go into effect and allow this trusted person to make these decisions on your behalf. 

However, another important document that should be put in place in conjunction with your durable financial power of attorney and health care power of attorney is called the living will declaration. What this document does is that it states your wishes when it comes to the withdrawal and withholding of certain life support and life sustaining medical treatment. For example, should you become incapacitated by illness or injury, such as in a persistent vegetative state, or a medical condition of which you will never recover, this document would state your wishes on whether you would want continued medical treatment and to be kept alive with artificial life support systems, or if you would like all artificial life support systems to be withdrawn and permit you die naturally. 

You should be aware that if you do not have the living will declaration in place, then your family would be left with the difficult task of making the decision to continue or withdraw artificial life support systems, and their decision may not be the decision that you would want for yourself. In addition, without the power of attorney documents in place, your family would also be left with the task of going to court, nominating an individual, and asking a judge to name this guardian over you in order to make these healthcare and financial decisions when you are no longer capable to do so.