Caring for your aging parents is often complicated. Your parents may resent any attempts to curtail their rights or freedoms, such as restrictions on their ability to drive a vehicle. As an adult caring for adults, you have to carefully balance their realistic needs with their emotional health. You want to do what is right for your loved ones and support them, but you also want assurance that you can manage the situation in the future.
A potential compromise exists in the creation of a financial power of attorney. This legal document can allocate certain financial rights and responsibilities to you or another member of your family. If a time comes when your loved ones can no longer make sound decisions due to dementia or when they are incapacitated, the power of attorney will ensure that your family can handle their needs and protect their assets and estate.
Specific power of attorney documents protect all parties involved
For the older person signing a power of attorney, it can feel like signing away the right to make choices in the future. In reality, however, the power of attorney can only get used in the event of a severe medical event or verifiable mental decline. That means that your aging loved ones don’t have to worry about losing their autonomy or right to make financial decisions. Working together to create a highly specific power of attorney can give your older loved ones peace of mind about what authority may pass on to others.
Power of attorney documents can be incredibly specific if need be. If your loved one doesn’t feel comfortable signing over all financial control to you or someone else he or she trusts, the power of attorney can apply only to specific accounts or assets. That ensures that one person can’t undermine a carefully created estate plan or destroy the legacy of the person signing over power of attorney.
How a power of attorney protects your family
If your loved one becomes unable to make decisions or communicate, you could find yourself in a difficult position. Dementia, comas and other medical issues can leave your loved one alive but unable to address the financial needs of maintaining a household. A power of attorney allows the person granted authority to pay bills and make other important financial decisions when the grantor is unable to do so.
This can protect assets from liquidation. An extended period of incapacitation could result in an unpaid mortgage, for example. Over a month or two, that could result in foreclosure, if no one else can legally access family assets to pay. A power of attorney ensures those important bills get paid and that the assets your loved ones have built over a lifetime remain protected, no matter how their medical situation changes.