Watching your parents age can be immensely difficult, and this may be particularly true if your parents are suffering from dementia. At some point, it may be wise for you and your parents to sit down and talk about creating powers of attorney.

Power of attorney grants a trusted person the right to make important decisions on behalf of the person who creates the document. There are two main types of power of attorney¬†— financial and medical. Typically, powers of attorney are established with the help of an elder law or estate planning attorney.

Financial power of attorney

Power of attorney for finances grants someone the right to make decisions regarding financial, legal or business affairs. For example, your parent, called the “principal,” will appoint you, or another trusted person, as the “agent.” The power of attorney can be drafted so that the agent takes control of financial matters in the event that the need arises — particularly if the principal becomes incapacitated and unable to make sound financial decisions.

Essentially, having power of attorney enables you to act on your loved one’s behalf, meaning you can access their bank accounts, pay bills or sign real estate transactions, among other things.

Medical power of attorney

Medical power of attorney grants the agent the right to make decisions¬†with regard to the principal’s medical treatment and health care. The agent may, for example, determine who is going to have access to your parents’ medical records. Depending on how the document is drafted, the agent may also have the right to make decisions with regard to life-sustaining medical treatment in the event that your parent becomes terminally ill.

Your parent’s wishes regarding end-of-life medical treatment can be further clarified with the creation of a living will.