If you’re making an estate plan, then you should understand what a power of attorney is for. Here’s what you should know:
A power of attorney is a representative that you designate in your estate plan. This representative or agent makes decisions on your behalf. They don’t initially make decisions once designated, instead, you have to be in a state of physical and mental limitations that prohibits you from making decisions for yourself. In other words, a power of attorney typically only comes into play if you develop a mental illness, suffer a catastrophic injury or become incapacitated, which would limit your ability to make decisions.
There are two kinds of power of attorney: financial and medical. A financial power of attorney handles debt, rent, utility payments, taxes and anything relating to money. A medical power of attorney would handle health decisions such as medication, surgery or therapy.
A power of attorney, as you may have guessed, is critical for your estate plan, health and finances. As such, you shouldn’t pick just anyone to be your power of attorney. There are some characteristics that people look for when picking their power of attorney, such as the following: