Your parents may have achieved senior citizen status, and the subject of powers of attorney has come up. These agreements can take many forms; understanding how they work in certain situations will be helpful when you begin to talk with your parents about their future care.
Your parents can assign powers of attorney as part of their will. They may choose you or someone else, but the person they select as their agent should be someone they feel will act in their best interests.
The simple solution for competent people
If your parents are both sound of mind and capable of making financial decisions, suggest to them that they grant durable, a general power of attorney to each other. If one of them should become incapacitated, the other can handle day-to-day finances. Depending on their needs, your parents could also create a narrow power of attorney that would allow you, or anyone they choose, to sign checks and pay bills on behalf of the incapacitated person.
The springing power of attorney
If your parent agrees to give you "springing power of attorney," the agreement will not take effect until a physician verifies that Mom or Dad is either incapacitated or mentally incompetent.
Managing complex responsibilities
If there are investments to control, business decisions to make or estate-planning issues to handle and one spouse is mentally or physically unable to deal with these responsibilities, the other spouse may not wish to take on such tasks. Your parents might assign certain powers to a professional, such as an attorney or financial advisor, who can step in.
Working within a time frame
Your parents may decide to take a month-long trip to Europe, or your dad may be facing a total knee replacement, which will require a certain amount of recovery time. They can grant a power of attorney that will only be effective for a specific amount of time.
Avoiding court interference
Whether you are the agent your parents select or they decide on someone else, choosing to address the matter of powers of attorney in their will is a smart move for your folks to make. If no such assignment is made, and your mother or dad becomes incapacitated, the court will appoint a guardian, and the choice may not sit well with you and your family. Be sure you mention this when you begin those conversations with your parents about their future care.