Your parents may be vibrant, healthy people, but they may also be approaching senior citizen status. Because you can’t know the future, it is never too early to consider initiating a conversation about the advantages of powers of attorney.
Few people are fortunate enough to go all the way through life without some sort of physical or mental issues, especially in their later years. Your attorney can assist in explaining how powers of attorney work, and your parents can choose from among several kinds, depending on their needs.
The durable general power
If your parents are married, mentally competent and able to make financial decisions, they may want to grant each other a durable, general power of attorney. This will allow them to make financial decisions and write checks on behalf of each other. If in the future, one of them becomes incapacitated, the other can manage the household finances.
The springing power
If the mental health of one parent has deteriorated to such an extent that he or she is not able to properly exercise power of attorney, there should be a backup who can do so. You can create what is called a “springing power of attorney,” an agreement that would only become effective if a physician confirms that your parent is either incapacitated or mentally incompetent.
Help with ordinary money management
Your mom or dad may be mentally competent but needs help with routine tasks, such as paying bills or managing interaction with a bank. An agreement with narrow powers might be just what you need to step in and help your parent with ordinary money management.
Assistance with more complex financial responsibility
Let us assume that your father has already set up an estate plan, has a number of investments and owns part of a business. If he should become incapacitated, neither you nor your mom may want to deal with all the responsibilities involved. This is a good example of how thoughtful prior planning can help when a crisis develops. An experienced, trusted attorney can assume certain powers on your father’s behalf and ease the burden on your family.