Estate Planning – Power of Attorney
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As part of the personal finance series, last week I wrote a post on estate planning. I couldn’t do full justice to the topic in one post. This is a follow up post to cover some of the topics I couldn’t address earlier.
Today, we will look at the different types of power of attorney we should have in place as part of estate planning.
A “Living Will” has nothing to do with the traditional “Will”. This is the first thing you need to know.
If you are on the deathbed, a Living Will would declare your desire to be or not to be on any life prolonging measures should there be no hope for recovery. With a Living Will, you choose someone you trust to make certain medical choices on your behalf.
After the Living Will is drafted, it should be given to the physician for review. He may recommend some changes to it or not agree with it due to religious reasons. In that case, you would need to be transferred to another physician.
The main thing to remember is that without a Living Will, there is no way for a physician to know your desires.
Healthcare Power of Attorney
While the Living Will is limited to deathbed medical decisions, a healthcare power of attorney is meant for all healthcare / medical decisions to be made on your behalf as long as you are unable to make them yourself.
A healthcare power of attorney could also include some provision for deathbed wishes.
Based on the research I have done thus far, you could have both a Living Will and a Healthcare Power of Attorney in place.
Financial Power of Attorney
Many states have as a form for providing financial power of attorney. Many banks and financial institutions have their own forms for financial power of attorney. You may need to sign before a notary public and also may need witnesses.
You can set up the financial power of attorney to go into effect while you are available or you are ill and unable to make financial decisions.
How much or how little you empower a person you trust to make your financial decisions is totally up to you.
The laws and the required documents to have a Living Will, durable healthcare and financial powers of attorney vary slightly from state to state. Nolo is a great place to find and create the right legal documents for your respective states.
(I am not an attorney. This post has my thoughts and opinions and must not be considered legal advice. Always consult an estate planning attorney for advice.)