Medical and Financial Power of Attorney—What’s the Difference?
Powers of attorney are legally binding documents that authorize other people to act on your behalf if necessary. Among various types, people usually opt for financial and medical powers of attorney (also known as health care proxies), which have a similar structure but serve a different purpose.
This article will illustrate the difference between a medical and financial power of attorney. We will also explain why you should avoid generic templates of this document and get a personalized one .
What Is a Financial Power of Attorney?
A financial power of attorney is a document that appoints another person to handle financial and estate matters in your stead if you can’t. The agent you choose should be able to:
- Pay bills and sign checks
- File tax returns
- Deposit your Social Security checks
- Sort through your letters and mail
- Close real estate deals
- Manage your business affairs
You can choose whether you want to sign a:
- Limited power of attorney, which typically applies to a specific situation or period when you are unable to handle your financial responsibilities
- Durable power of attorney, which serves to manage all your financial affairs, even after you become permanently incapacitated
How Does a Medical Power of Attorney Differ From a Financial One?
While a financial power of attorney refers to legal and financial matters, a health care proxy serves to appoint a person who will make medical care choices in your stead. The designated health care agent can decide on:
- Medical staff members that should be hired or dismissed
- Suitable health care facilities for you
- Treatments and medications you should and shouldn’t receive
- Comfort and end-of-life care
- Life-sustaining procedures
- Organ and tissue donation
Who Should Be Your Agent?
Whichever power of attorney you want to prepare, choosing an adequate agent is a vital part of the process. The person you designate as your representative must be an individual of trust.
The table below offers some suggestions on who you should pick as your agent, but also shows who wouldn’t be a good choice for such an assignment:
| Your Representative Can Be | Your Representative Shouldn’t Be |
|---|---|
|
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Can a Financial and Health Care Power of Attorney Be in a Single Document?
In theory, it’s possible to combine a financial and medical power of attorney in one document, but it isn’t recommendable. There are two main reasons for avoiding this option:
- Person you choose as your health care agent may not be familiar enough with your finances or able to perform related tasks well. The same applies to a financial power of attorney agent—they might not be the best choice when needing to decide on your health care treatment if you suffer permanent incapacitation
- Medical powers of attorney may also include personal details you don’t want to share with the individual who manages your finances and vice versa
With all this in mind, appointing a separate agent for each document typically brings the best results.
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- Provide us with the names of your agent and the chosen witnesses
- Answer a few of our chatbot’s questions
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