People preparing for retirement often decide to create estate plans. Not only do they start thinking about their legacy and the need for a will, but they may also want to plan for the potential of their health worsening as they age.
Older adults frequently add additional documents to basic estate plans as a way of protecting themselves against medical issues as they age. Powers of attorney are often among the documents that those preparing for retirement or already enjoying their golden years want to add to their estate plans.
Why are powers of attorney so potentially valuable to those at or past the age of retirement?
Assistance may be necessary in short-term emergencies
Financial and medical powers of attorney grant an agent or attorney-in-fact limited legal authority. They have the power to access certain financial resources and pay bills when the principal is incapacitated. They can also potentially make choices about the medical support that an older adult receives.
Older adults who have sudden medical emergencies, including heart attacks or strokes, may end up temporarily incapacitated. They may not be able to make decisions about their health care or manage their households until their condition improves. Powers of attorney protect people from scenarios in which they recover from a medical situation, only to face serious financial hardship later.
Older adults can plan to avoid guardianship
As people age, their health may slowly decline. In some cases, people may develop dementia and other debilitating medical issues. Family members or even healthcare professionals could then seek a guardianship that gives them control over a vulnerable adult’s finances and healthcare decisions.
Many older adults choose to draft durable powers of attorney so that they can choose someone to fill that role if they ever become permanently incapacitated. While standard powers of attorney may lose their authority when someone becomes permanently incapacitated, durable documents can remain in effect for the rest of the principal’s life. They can rely on the person they nominated to manage their affairs even if they no longer have the authority to make legal decisions on their own behalf.
Understanding why many older adults decide to add powers of attorney to an estate plan could help people better protect themselves in their golden years. Preparing for the possibility of incapacity can be as useful as preparing for one’s future legacy.