A healthy, competent adult can handle his or her own financial and business affairs. However, a life-changing event can make that impossible.
Have you considered who will manage your affairs if you have an accident, develop dementia, have a stroke? Will someone be able to act in your stead if you take a trip out of the country? If you cannot take care of your financial or medical needs, someone will need to act for you to pay your bills, interact with your bank, make financial and/or medical decisions, or complete other tasks.
Durable Power of Attorney
A durable power of attorney allows you to name someone to make financial or medical decisions for you if you are unable. It will remain in effect if you should ever become incapacitated. A durable power of attorney may be revoked or invalidated by court order. A power of attorney terminates at your death and is not a replacement for a Will.
A properly drafted and executed general durable power of attorney allows your agent to do anything you can do with your assets. This is a powerful document and you should appoint someone you can trust to serve your best interest. In addition to the general powers, you can elect to give your agent the power to sell a property, mortgage property, grant loans or give gifts to loved ones and transfer property to your revocable trust (to avoid probate).
Nondurable Power of Attorney
A nondurable power of attorney can be used for a specific real estate transaction or financial transaction when you cannot present to sign or execute certain documents. Typically a nondurable power of attorney is used in real estate transactions, or when someone elects to delegate their financial affairs to an agent during an extended absence.
Medical Power of Attorney
A medical power of attorney allows you to name an agent to make medical decisions on your behalf if you become incapacitated. This very important document allows your agent to make any necessary health care decisions for you and to see that doctors and other health care providers give you the type of care you wish to receive.