One important component of an estate plan is setting up the power of attorney designations. There’s one for health care and another for finances. For individuals who are likely to need nursing home care in the future, having a financial power of attorney established is important.
The financial power of attorney gives someone the power to take care of your money when you can’t do it. This is especially helpful if you become incapacitated or are unable to leave the nursing home to take care of these matters.
What can someone with a financial power of attorney do?
The person who has financial power of attorney can ensure your bills are paid. They can also make the same decisions you can about your assets and other financial matters. You must ensure you choose someone who will act in your best interests as your money manager.
One thing that’s often misunderstood about the financial power of attorney is that this person pays your bills using your money. Accepting the financial power of attorney designation doesn’t mean they’re financially responsible for your bills, so they don’t have to use their own money to pay for things for you.
Some people are apprehensive about being the financial power of attorney designee for a person who’s in the nursing home because they assume they’ll have to pay the bill if you don’t have the money to do so. It may help them to feel better about accepting this responsibility if they know that’s not the case as long as they’re managing your money properly.
Ultimately, the senior citizen and their chosen power of attorney designee have to determine what’s best. This arrangement makes it possible for someone outside of the nursing home to control the finances, but that individual must act ethically.