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3 ways to limit your risk when drafting powers of attorney

On Behalf of | Nov 28, 2022 | Estate Planning

Your estate plan determines what happens when you die and also what happens if you need medical support later in life. If you end up in a coma or the courts determine that you lack the necessary testamentary capacity to act on your own behalf, someone else will need to make your medical decisions and handle your financial affairs.

Powers of attorney allow you to designate one to assume that authority in an emergency where you require support. Many people worry about giving up power over their finances or healthcare decisions. What limitations can you add to powers of attorney to minimize your risk?

  1. Separate financial and medical authority

Although you can choose one person to handle all of your affairs, the risk then is higher of that individual struggling with their responsibilities or succumbing to the temptation that can come with having that degree of authority over another person. By naming different people to handle financial and medical matters, you reduce the likelihood of someone abusing that authority or somehow failing you.

  1. Leave very detailed instructions

By limiting the circumstances in which people can use the powers of attorney, possibly by requiring incapacitation that lasts a week or longer, you can protect yourself from someone taking advantage of you in a short-term emergency.

Beyond that, you can limit what authority they even have by providing very clear instructions about the medical care you want to receive or what financial transactions they can conduct on your behalf. The more detailed you are in your documents, the easier it will be for you to protect yourself.

  1. Name an alternate

Ideally, you will regularly review and update your estate planning documents, including powers of attorney. After all, your medical wishes and financial needs will change over time. Your relationships with other people will also change and may necessitate an update to your powers of attorney.

Naming two people to hold authority at the same time or a second candidate as an alternate or successor can be a viable solution for those worried that the person they choose won’t be available to act on their behalf in an emergency.

Including the right details and provisions in your powers of attorney will help protect you if a medical emergency ever necessitates outside support for your basic needs.