If you’re like most people, you are going through life doing your best to manage your bills, without thinking about who will pay them on your behalf if you are not able to. But, the last thing you want on top of the medical bills you’ll accrue if you are hospitalized or need rehab care is a collection agency coming after you. So, it’s wise to plan ahead, get your affairs in order, and appoint someone you trust to pay those bills through a durable power of attorney.
A durable power of attorney is a legal document that allows you to name someone to help with your financial affairs whenever you would like, including if you become unable to handle them yourself. The person you name should be someone you trust with your finances, someone who could make decisions about your finances if need be. That person also could be your health care proxy or health care buddy.
Why should you give someone a durable power of attorney? Giving someone you trust a durable power of attorney should give you peace of mind that your affairs will be taken care as you would like, if you cannot take care of them. Without a durable power of attorney, the person you would want to handle your financial affairs would have to go through an expensive and lengthy court proceeding to make these decisions. Moreover, without the durable power of attorney, a judge might appoint someone you do not trust to handle your affairs.
How long does a durable power of attorney last? The durable power of attorney lasts until you die or until you change it.
What is the difference between a durable power of attorney and a power of attorney? If you give someone a power of attorney rather than a durable power of attorney, then the person you designate only has authority over whatever financial matters you specify until you become mentally incompetent. But, if you choose, you can make the power of attorney document a durable power of attorney. You need only include language in the power of attorney that specifies that the person you designate has authority if you become mentally incompetent. Unless you make the power of attorney a durable power of attorney, the person you designate cannot handle your financial affairs if you become mentally incompetent.
Who should have a copy of your durable power of attorney? You should give a copy of the durable power of attorney to all financial institutions at which you have accounts. And, you should give a copy to the person you name to have your durable power of attorney or, at the very least, let that person know he or she has that authority and where to find the document if needed.
If I give someone a durable power of attorney, will that person be able to take money from my bank accounts? Yes. The person you name as having durable power of attorney, your financial agent, will be able to take care of your financial affairs using your bank accounts if you give the person that authority. But, this agent does not own the money in your accounts and may not take money from your accounts for himself or herself.
What should I discuss with the person I name as having durable power of attorney? You should let your agent know about all institutions with which you have financial arrangements, including your banks, credit card companies, financial advisors and insurance companies.
Can I cancel my durable power of attorney? You can cancel or change your durable power of attorney at any time by destroying it and notifying the financial institutions at which you have accounts that you have destroyed it or changed it.
Is there anything more I need to do? Yes! You should be sure to let the person to whom you give your durable power of attorney know and you might want to let other people you trust know that this person has durable power of attorney. You also need to let your bank know about your durable power of attorney. You also need to pull together a list of the bills you pay, your checking account information, and other information needed to make sure your bills are paid and have that available to the person to whom you give your durable power of attorney. Click here for a checklist.
Here’s more from Just Care:
- Five steps to get your affairs in order in case of emergency
- Five ways to ensure the people you love are safe and healthy
- Read this before leaving the hospital with new prescriptions
- Plan ahead for a hospital visit: Talk to the people you love about these seven important items
- Seven things to do before you or someone you love leaves the hospital
