When your parents age, it becomes a struggle to balance respect for their independence with protecting them from the negative impacts of deteriorating physical or mental health. If you let them handle their affairs independently, they will likely mismanage their finances or make wrong health decisions. And after that, all you can do it to try and correct the damage.
However, your parent can do something to protect them once they become incapacitated or can’t handle certain situations/tasks on their own. They can create a power of attorney authorizing you or another person to act on their behalf in certain situations. Please keep reading to learn what a power of attorney is and its importance to aging parents.
What is a Power of Attorney?
A power of attorney is a legal document where an individual (principal) authorizes another person (agent) to act on their behalf in certain situations. This means that the principal gives the agent powers to make certain decisions on their behalf if they become incapacitated or in certain situations. However, the agent must decide or act in the principal’s best interests.
So if your parent creates a power of attorney and names you as the agent, you will have the power to make their financial decisions, health-care decisions and handle any other task as outlined in the POA document.
Types of Power of Attorney
There are different types of power of attorney. Here are four common types:
General power of attorney – This POA gives the agent the power to perform almost any act on behalf of the principal. The agent can open & close bank accounts, manage the principal’s finances, and more. This arrangement is terminated when the principal becomes incapacitated, dies, or revokes the document.
Limited power of attorney – In this type of POA, the agent is only given specific powers to handle/perform certain tasks, like selling a home.
A durable power of attorney – This POA gives an agent power to act on behalf of the principal even after the principal becomes incapacitated.
Springing durable power of attorney – This type of POA becomes effective when a specified event occurs, like when the principal becomes incapacitated.
Importance of Power of Attorney to Aging Parents
A POA has so many benefits for aging parents and their families. Here are a few benefits:
- Convenience – A power of attorney allows you (agent – adult child) to handle the affairs of your aged parent in case they become incapacitated due to an illness or accident. This ensures that your parent’s affairs, like filing returns, paying bills, selling a home, and managing bank accounts, are done, even when they can’t handle them at that time.
- Protect aged parents from financial mismanagement – When your aging parent becomes incapacitated, they can easily mismanage their finances and even become bankrupt. But with a POA, the agent (adult child or relative) will oversee their finances and make necessary financial decisions in the best interest of the aging parent.
Suppose you want to create a power of attorney, Forms. Legal can help you. We offer the power of attorney templates for different states. All you need is to fill in the details, download and print the document, and sign it.