Maybe this is your aging parents’ situation: for all of their married life, your father has taken care of their financial affairs, from managing investments to paying the household bills. But your dad now has some minor health problems, and little warning bells have gone off in your mind.
What would happen if he were to suddenly become incapacitated? Who would make financial decisions and handle the bank accounts and bills? Has someone been designated to make healthcare decisions in the event that your parents can’t do so themselves?
Address these issues now by creating powers of attorney.
Fundamentally, creating powers of attorney is a matter of good estate planning. By granting financial power of attorney, you give a trusted person the power to manage your financial affairs in the event that you become physically or mentally incapable of doing so yourself. Typically, the person who is granted power of attorney is called an agent or an attorney in fact. If appointed by your parent, this person must act in accordance with your parent’s wishes and keep your parent’s best interests in mind at all times when carrying out the fiduciary obligation.
In addition to financial power of attorney, there is medical power of attorney. This is granted to someone who can be trusted to make healthcare decisions on behalf of a person who is incapacitated.
The plan can be customized.
When you talk about financial power of attorney with your parents, make sure they understand that there can be more than one agent/attorney in fact — a person to manage investments and another person to write checks and pay bills. There can also be a separate person with medical power of attorney. Or, if it makes more sense, one person can be granted financial and medical powers of attorney.
If your parents have questions, an experienced elder law and estate planning attorneycan fill in the details.