Some estate planning documents are more common than others. Most people who intentionally plan their estates will create a will, but trusts are less common. Just because documents aren’t used as frequently as wills are is not an indication that they are less valuable.
Powers of attorney are a perfect example. The vast majority of adults in the United States would derive some protection and peace of mind from the creation of powers of attorney. However, many people avoid creating powers of attorney because they don’t understand the value of the documents or misunderstand the effect they can have.
How can you determine if powers of attorney would be a smart inclusion in your estate plan?
Do you have people with access to all of your financial resources?
One of the most compelling reasons to create powers of attorney is to ensure that you will not experience significant financial hardship because of an unexpected medical emergency. You may need someone to pay your bills.
Maybe your checking account is only in your name, even though your spouse relies on your income to pay the mortgage every month. Maybe you don’t have a spouse at all and therefore have no one who can legally access your financial resources and complete transactions on your behalf. Financial powers of attorney can give people access to specific accounts and the authority necessary to manage specific financial matters on your behalf in the event of your incapacitation.
Is there someone to speak up about your medical wishes?
In an emergency where you cannot communicate your medical wishes to hospital staff members, you are dependent on a spouse to speak on your behalf. If you are not married or if your spouse experiences a medical emergency at the same time that you do, you will be subject to the standard best practices at the hospital where you receive treatment.
The doctors and other professionals there may not know your religion or preferences and may give you inappropriate medical treatment. A medical power of attorney allows you to name someone outside of your immediate family to speak on your behalf in a medical emergency.
Powers of attorney are typically only effective in scenarios where you experience complete incapacitation, and you can further limit them by making them very specific. Rather than being documents that put you at risk, they protect you against unpredictable and potentially catastrophic experiences.
Adding the right documents to your estate plan will protect you regardless of what the future holds.