Why you need a POA in your estate plan

Why you need a POA in your estate plan

On Behalf of | Jun 6, 2024 | Estate Planning

When it comes to estate planning, many immediately think about deciding who gets to inherit the house or the cherished family heirloom. In reality, estate planning encompasses much more than the distribution of your assets after your passing. With the right tools in place, it can also ensure that your wishes are upheld during unforeseen life events like medical emergencies. One essential tool in your estate planning toolkit is the power of attorney (POA), which ensures that someone can manage your affairs and honor your wishes if you are ever unable to speak for yourself.

In the United States, two types of POAs play crucial roles in estate planning: financial POAs and health care POAs.

Financial power of attorney

If you find yourself unable to manage your affairs, perhaps due to a medical procedure or a sudden, serious illness, a financial POA can be a crucial lifeline. This POA allows your designated agent to manage your financial affairs, from paying your bills and managing your investments to even selling a property on your behalf. This can help you ensure that your mortgage, rent, utilities and other bills are up to date, allowing you to avoid any financial turmoil.

Health care power of attorney

A health care POA allows your chosen agent to step in and make medical decisions on your behalf in a scenario where you are unable to communicate your health care preferences. This is particularly important during critical times when swift decisions might be necessary for your treatment plan or other medical care.

Having a POA in your estate plan does more than just ensure practical decisions are handled – it significantly eases the emotional load on your loved ones. Without this legal safeguard, they might find themselves under the stressful and heart-wrenching pressure of trying to guess what they would have wanted in critical situations. They could even end up in lengthy legal battles just to gain authority over your affairs. A POA can be a compassionate step that protects both your peace of mind and your family’s, preparing everyone for whatever life may bring.