You’ll have to make some fairly big decisions when making a will. For starters, you’ll have to decide who will benefit from your estate and how your funeral is arranged. Then, you’ll have to designate an executor of your estate to ensure everything is top-notch for when your beneficiaries earn their inheritance, pay off taxes and resolve any unpaid debt.
However, because a will deals with what happens to an estate after someone dies, there’s an important factor that many people overlook when planning out a will: their power of attorney (POA). A POA is a representative that will make decisions on your behalf if you’re incapacitated, develop a mental condition or otherwise can’t make decisions for yourself.
There’s more you should know about your power of attorney:
6 kinds of power of attorney
A power of attorney doesn’t just handle all decisions if you’re incapacitated. Depending on what your POA represents, they’ll have limited choices to make. As such, there are six kinds of POA:
- Financial POA: You could have one person manage all of your financial responsibilities if you’re incapacitated, such as paying rent, utilities, taxes or debt.
- Medical POA: Like a Financial POA, you could have one person be the sole representative over your medical decision like surgery, medication, therapy or medical care if you’re found to be incapacitated.
- General POA: Many people find having two separate people handle both financial and medical decisions confusing, tedious and redundant and instead designate one person to handle both matters.
- Durable POA: A representative may be given power of attorney immediately after documents are signed and after the principal becomes incapacitated.
- Springing POA: Conversely, you could have a power of attorney take effect only after you’re incapacitated.
- Special/Limited POA: Some power of attorney only takes effect for only a limited time for a specific matter – often related to selling and buying real estate.
Ultimately, you should consider a POA who is trustworthy and responsible and can put your best interests first. Yet, many people struggle to find the right POA and even more so when deciding what kind of POA they should represent. If you’re making a will, then you may need to consider your legal options.