If you or a loved one is sick or ailing, who will take care of your affairs? Who will take care of the financial obligations such as paying the mortgage or your children’s tuition? Making plans for handling these important financial responsibilities now (while you are able) can greatly reduce the stress on your loved ones and family members at a critical time down the line.
We know that most people don’t like to think about the “what if”, but the truth is that unexpected turns in life often happen and when they do, you need to be prepared. The risks of not protecting yourself or your family could mean leaving your financial obligations in the hands of someone you don’t trust.
Durable power of attorney 101
This is exactly where a power of attorney comes in to play. A durable power of attorney is a document that will allow you to appoint a person to conduct financial transactions on your behalf. You can learn more about powers of attorney and how they are used by clicking here.
There are two kinds of durable power of attorney:
General Durable Power of Attorney
This first option is the most common and allows for the person you appoint as your agent to control your finances. That means they can access your bank accounts to pay bills, take care of expenses and manage the finances of your family.
A durable power of attorney may also include some provisions to request medical records and will reference HIPAA language (privacy related). However, you should have a separate document, called an advanced medical directive, which will outline your wishes as they relate to medical care.
Contingent Power of Attorney
The second type of power of attorney places limits when decisions can and cannot be made for you. This power of attorney gives the agent the same type of control as the durable power of attorney, but there are only specific circumstances that will allow those powers to become active. For example, you can create a contingent power of attorney that would only go into effect if you were to become incapacitated. However, safeguards are often put in place for these types of scenarios such as requiring your doctor sign off on your condition as being “incapacitated”.
As the Internet becomes a deeper, more infinite pool of information, it is easy to see how some people might lean towards grabbing a template off of the Internet for putting together a durable power of attorney on their own. We strongly recommend making use of our attorneys to draft your agreement, mostly to make sure that you are staying compliant with the state laws in Virginia and that your wishes will be followed in the worst case scenario!