Durable Powers of Attorney
Alongside and apart from the Wills and Trusts aspect of estate planning, having an effective durable power of attorney in place for both financial matters and health care decisions makes clear designations of who a client wants to take care of those decisions if the client is unable to do so for themselves. Absent a durable power of attorney, tensions can rise between children with differing financial and health care related opinions, adding stress to an already stressful situation.
A durable power of attorney simply means that the document stays in effect if you become incapacitated and unable to handle matters on your own. (Ordinary, or "nondurable," powers of attorney automatically end if the person who makes them loses mental capacity.)
There are two types of power of attorney:
POA for healthcare: Gives a designated person the authority to make health care decisions on behalf of the person.
POA for finances: Gives a designated person the authority to make legal/financial decisions on behalf of the person.
Families should prepare these legal documents long before someone starts having trouble handling certain aspects of life. At the time of the signing, the elderly person establishing a durable power of attorney must be capable of deciding to seek assistance. For example, people in late stages of Alzheimer's disease may not be "of sound mind" and therefore unable to appoint a POA.
Like a trust, a durable power of attorney can be written so that the transfer of responsibilities occurs immediately. Or, the POA can state that the POA goes into effect when your elderly parent becomes incapacitated. Until that point, the elder can choose to continue to make decisions on his/her own.