A power of attorney enables a third party to manage some element of another party’s life while they are still living. There are multiple forms of powers of attorney and understanding them is important for anyone creating an estate plan.
Some powers of attorney may grant the right and responsibility to manage a person’s finances while others grant the right and responsibility to manage a person’s health care.
Durable power of attorney for finances
SmartAsset explains that one form of a durable power of attorney names another person to take care of someone’s assets. This may be useful if a person has a disability or becomes temporarily incapacitated due to an injury or illness.
Health care power of attorney
The ability to communicate with medical teams and make decisions regarding a person’s health care may be provided via a health care power of attorney, sometimes referred to as a health care proxy.
Durable and springing powers of attorney
Forbes indicates that a power of attorney that takes effect upon signing is called a durable power of attorney. That which goes into effect only when an event occurs that necessitates it is called a springing power of attorney.
Naming a power of attorney
Many people find it helpful to identify two people to act as dual powers of attorney. This may proactively alleviate concerns of potential fraud, especially in the case of a power of attorney over a person’s finances. Naming an alternate power of attorney may also be helpful if the original proxy is not available to take control when or if the time arrives.