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Understand the purpose of a power of attorney

| Jun 25, 2020 | Estate Planning |

One important role of an estate plan is setting up what needs to happen if you can’t make decisions for yourself. Most people wouldn’t want a stranger to make decisions about their medical care or their finances. You can prevent this from happening by establishing a power of attorney designation now. 

You can set one for health care and one for finances. While you can have the same person in charge of both, you don’t have to do it that way. Instead, you can have one person to make the medical decisions for you and another to make the financial ones. 

One critical consideration for this is that you should only name a person as your power of attorney if you’re sure they will only act in your best interests. They can’t do things according to what’s best for them. They have to make decisions that align with what you would do if you were able to make the choices. 

Some people name an immediate family member or spouse as their power of attorney. This is understandable; however, you must ensure that they will be able to handle the responsibility if something happens to you. In some cases, it’s better to name someone who isn’t going to be as impacted by your situation. 

You’ll have to make some specific decisions as you set up the power of attorney designations. Make sure you work closely with your attorney to ensure that the document and the powers you grant work toward your goals. Remember, you can always alter these if your wishes change over time.