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Sunday, June 18, 2017

Do I Really Need a Healthcare and Financial Power of Attorney?

A “power of attorney,” or POA, is a legal document that gives a named individual the same power to handle your affairs that you ordinarily have. A power of attorney may be “nondurable,” meaning that it ends once its creator becomes incapacitated, or “durable,” meaning that it continues after its creator becomes incapacitated.

Typically, a power of attorney document names the person or persons its creator chooses to handle their affairs. It lists the specific duties or powers the named person may exercise, and it names any conditions related to the exercise of those powers—for instance, that the named person may only exercise them if the creator is incapacitated.

A California estate-planning lawyer can assist you in drafting either of these documents.

Why Do I Need a Power of Attorney?

A power of attorney is an important part of any estate plan. When you create one or more powers of attorney:

  • You can choose whom you trust to make major medical, financial, and legal decisions for you if you cannot.

  • You can specify what types of end-of-life or emergency medical care you want—and which types you do not want.

  • You can divide these powers among multiple people, allowing you to choose the best person for the job when it comes to healthcare decisions, financial planning, and other tasks.

  • You make it easier for your loved ones to help you in dire circumstances.

Without a power of attorney in place, major decisions about your healthcare, finances, and other essentials will be laid in the hands of whomever your state’s laws dictate. This person may be someone you do not want making decisions for you. In addition, this person’s abilities to manage your affairs may be severely curtailed by state or federal law.

Do My Healthcare and Financial Power of Attorney Really Need to Be Two Separate Documents?

While it is possible to combine healthcare and financial powers of attorney into a single document, many attorneys advise against doing so. Here’s why:

  • Healthcare and finances are two separate, specialized topics. Your healthcare documents will contain information your financial advisors don’t need—and vice versa.

  • Healthcare decisions and financial decisions require the weighing of different sets of priorities.

  • Healthcare decisions and financial decisions require two different sets of knowledge and life experience. While the same person may have both knowledge sets, separating your powers of attorney allows you to choose two different people, if needed.

When you separate healthcare and financial powers of attorney, you can choose the same person to have power of attorney in both cases, or choose different people for each role. If you choose two or more individuals, make sure they can work well together.

Because a power of attorney is a relatively simple document to create, it is worthwhile to separate healthcare matters and financial matters into two separate documents. Doing so makes it easier to choose the right person for the job in both instances, and it helps the people designated in those documents to execute their roles more easily should the need arise.

For assistance in drafting your healthcare and financial powers of attorney, contact that Law Offices of Berge & Berge today at 408.389.6980.


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