One of the most important documents to include in your estate plan is your power of attorney. If something happens where you end up incapacitated, a power of attorney dictates who you want to make decisions for you.
According to CNBC, you should have two different people assigned as financial power of attorney and health-care power of attorney.
Understanding power of attorney
Powers of attorney are individuals of your choosing that take care of your finances or medical decisions when you can no longer do it yourself. For example, if you lose consciousness in an accident, your healthcare power of attorney makes medical decisions on your behalf. He or she should be someone that you trust will follow your instructions and has your best interests in mind.
Choosing individuals for powers of attorney
In some cases, you may choose the same person for medical and financial power of attorney. For example, if you have a family member you trust with your medical wishes and who has financial experience, one person may be enough to handle your affairs.
When choosing a financial power of attorney, the person should be responsible and have some experience making financial decisions. Your financial power of attorney handles your bills, investments and other decisions regarding your money. Powers of attorney may have a specific or broad role to play. For example, you may choose a power of attorney to pay your bills but not control investment decisions.
Keep in mind that you should revisit your estate plan often. Try to update your will or powers of attorney once every three to five years.