Durable Powers of Attorney for Finances and Health
It is important to plan for the possibility of incapacity. Not having a Power of Attorney in place exposes you to the possibility of a guardianship. A guardianship is when a guardian is appointed by the court to handle your financial and medical affairs. This could be a friend or family member, or even a complete stranger. Without the proper documents in place, you could end up having no say in who is chosen to be your guardian, and you will lose all of your rights.
Having a Power of Attorney for Finances and a Power of Attorney for Healthcare ensures that the person in charge of your affairs is someone that you know and trust who will care for your needs the way you would like. These documents allow you to choose, instead of the court.
A Power of Attorney can be limited or general. A limited Power of Attorney gives the person of your choosing the power to act on your behalf (such as sign checks, transfer property) while you are out of town, or otherwise unavailable. A general Power of Attorney is more comprehensive and gives the person of your choosing all of the powers and rights that you have.
A Power of Attorney for Finances is a document that gives the person of your chosing (attorney-in-fact) control over your financial affairs. This does not allow the attorney-in-fact to make decisions regarding your medical care.
A Power of Attorney for Healthcare is a document that gives the attorney-in-fact control over your medical care, but not your finances.
These are essential estate planning documents that should be executed along with a will or Revocable Living Trust.