A power of attorney is a legal document that is used to delegate legal authority to another. This document authorizes one person (the agent or attorney in fact) to act on behalf of another person (known as the principal) while the person is still alive. There are two main types of powers of attorney: a durable power of attorney and a health care power of attorney.
- A durable power of attorney authorizes one person to make financial decisions for another while they are still alive. A durable power of attorney can grant a person the ability to:
- Pay expenses
- Access safety deposit boxes
- File tax returns
- Conduct financial transactions
A durable power of attorney can be set up in 2 different ways. The first is a “limited” power of attorney which authorizes the agent to act on behalf of the principal for specific circumstances only, such as selling real estate. The second is a “general” power of attorney which typically gives the agent the authority to make any and all financial decisions on behalf of the principal.
- A health care power of attorney authorizes a person (called the patient advocate) to exercise powers concerning medical related decisions. This includes the authority to withhold or withdraw life support or be placed under hospice care. A health care power of attorney is necessary so that if you become incapacitated, someone else can make medical decisions on your behalf.
It is very helpful if you first discuss your preferences about end of life measures with your family, when there is no crises, rather than having them guess about what you would want. It is also good to have a clear understanding among family members of your preferences in order to avoid any conflicts.