Powers of attorney are among the most universally useful estate planning documents. Almost anyone over the age of 18 could potentially benefit from integrating financial powers of attorney into an estate plan. Once a young adult becomes a legal adult, their parents no longer have control over their resources.
Those who have not married may not have anyone capable of managing their financial affairs in an emergency. Even those with spouses could be vulnerable to serious financial setbacks if an emergency that incapacitates them also affects their spouse. The following are ways that financial powers of attorney protect those who experience unexpected incapacitating emergencies.
Addressing financial obligations
Someone hospitalized due to a brain injury might be unconscious for weeks. Anyone experiencing prolonged periods of unconsciousness, diminished cognitive function or communication challenges might be incapable of handling their financial responsibilities. Those who experience incapacitating medical events are theoretically at risk of falling behind on their financial obligations. They could lose their lines of credit, face foreclosure and experience a massive drop in their credit score. A financial power of attorney can name an agent or attorney-in-fact to pay someone’s bills until their condition improves.
Handling medical costs
Medical facilities must provide life-saving care regardless of someone’s ability to pay. However, once someone’s condition stabilizes, a hospital could deny future treatment until they prove their ability to pay. Financial powers of attorney help ensure that there is someone to address medical expenses so that an incapacitated person can receive appropriate and timely care.
Managing investments
Perhaps someone has several rental properties in their name. They could be incapable of fulfilling their obligations as a landlord during their period of incapacitation. Maybe someone has a business that they operate that requires management, such as ordering supplies or issuing worker paychecks. The party empowered in financial power of attorney documents can oversee someone’s investments so that they do not lose value during temporary incapacitation.
The decision to create power of attorney documents can give someone peace of mind, as they know that they and their family members can rely on appropriate support should a major emergency arise. Powers of attorney are among the most basic and beneficial estate planning documents across the board.