There are many different documents that can help people protect themselves. Estate planning is as much about personal vulnerability as it is about the protection of dependent family members. Drafting a will or funding a trust can be a smart decision for those who worry about the comfort and financial stability of their dependent family members. Many people also draft documents that take effect if they experience some kind of emergency, like a car crash that puts them in a coma.
Powers of attorney are very useful estate planning documents that help people connect with support when they are vulnerable. Why do so many people designate another person to handle their finances or medical needs?
A lack of authorized support
Many young adults do not realize that their parents lose all authority when they turn 18, regardless of their medical condition. Even if they still live at home with their parents, their parents cannot access their medical records or make decisions about their health care in an emergency.
They may also be unable to access financial accounts to cover a young adult’s obligations, such as credit card or student loan payments. The same is true of any adult who does not have a spouse to act on their behalf. Powers of attorney are important for those who have financial obligations or specific medical preferences but no one authorized to act on their behalf.
A looming medical issue
Some people learn in middle age that they have a progressive medical condition that they inherited from their family. Others develop conditions like cancer that might lead to incapacity in the future.
Those facing pressing medical challenges due to either acute or chronic medical conditions may want to draft powers of attorney in case their condition worsens.
The consequences of advanced age
Those preparing for retirement often need to carefully consider what may happen to their health and finances later in life. Without powers of attorney, other people, including distant family members or professional caregivers, might seek guardianship or conservatorship over a vulnerable adult. Powers of attorney help prevent that scenario by allowing an individual to name their own agent or attorney in fact in durable documents.
Adding the right paperwork to an estate plan can help protect people in a variety of challenging circumstances. Even if people never need to use certain documents, they may derive peace of mind from the protection their paperwork provides.