A Power of Attorney (POA) is a document that gives legal authorization for someone to act on your behalf. There are different types of powers of attorney, each of which you would want to use in different situations.
There are three main types of power of attorney and together they are called the ‘Guardian Trio’. These are: (1) power of attorney for finances, (2) power of attorney for health care, and (3) power of attorney for living trusts.
Power of Attorney for Finances
There are several reasons you might want to create a POA for your finances. If you become disabled or incapacitated for example, you might not be physically or mentally able to manage your own finances. Having a Power of Attorney executed allows someone of your choosing to step in and manage your bills and finances for you.
Likewise, if you become hearing disabled or suffer from poor eyesight, you might need help managing your day-to-day financial tasks. A General Power of Attorney allows someone you trust to speak to creditors on your behalf and handle banking transactions and other financial matters for you.
There are also instances where you need financial help for a certain period of time. If you’re planning to travel for example, you could draw up a temporary power of attorney, allowing someone to handle specific financial transactions on your behalf while you’re gone. When you return, the power of attorney would expire and you would once again have sole control over your finances.
Power of Attorney for Health Care
Despite all of the media coverage over the years, an alarming number of people have still not executed a Health Care Power of Attorney, also often called a Health Care Directive.
Yet, this is perhaps one of the most important documents you will ever create.
In the event that you become incapacitated, a health care POA is the only way to ensure you have someone you trust making healthcare decisions on your behalf.
Depending upon your condition, there may be several options available regarding your care. But because you’re unable to speak for yourself, it is up to the person you designate to make these difficult decisions for you. Choosing whether or not to leave you on life support or to attempt to resuscitate are common decisions that families have to face. Designating a person to make these decisions for you ensures that your wishes are always carried out and that your well-being is always considered. A durable power of attorney would enable this person to make decisions about your health care on your behalf. Durable means that your agent would have this power indefinitely, from the time of your condition for as long as you live.
Power of Attorney for Living Trusts
Creating a living trust can help protect you and your family should you become incapacitated or if you are otherwise unable to make decisions regarding your estate. This type of trust is usually revocable, meaning that it can be changed at any time, but if you become injured or ill, you may not be able to make the necessary changes and additions when they’re needed. A new grandchild for example, should be added to the list of beneficiaries, but if you’re incapacitated, that may be difficult to do. A power of attorney for your living trust gives authorization to the person of your choosing to act on your behalf when you cannot.
Paul A. Kraft, Esq.
Frank & Kraft, A Professional Corporation
135 N. Pennsylvania Street, Suite 1100
Indianapolis, IN 46204
(317) 684-6111 fax
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.