A Power of Attorney (POA) is a document that allows you to name someone to make a decision for you. Your Power of Attorney will dictate what decisions can be made and what your wishes are so they can be followed. For disability planning, there are two common types of POAs: medical and financial.
A Medical Power of Attorney allows your chosen medical agent to speak with your doctors about your care and to make medical decisions for you. This person is legally required to follow the medical dictates you have expressed to the agent as well as those listed in your POA.
A financial power of attorney can cover a one-time event while you are on a trip, or it can cover all financial decisions if you become mentally disabled. A financial power of attorney for disability is called a Durable Power of Attorney for Finances. Although it is intended to apply when you are disabled, it becomes effectice immediately so care should be taken as to who is in possession of this document. If you are planning to use your POA as part of a disability plan, make sure it is durable. If your POA is not durable, it will no longer work once you become disabled. You can use your POA to state what powers your agent.
Choosing an agent for your medical or financial needs is a process that should be taken seriously. Make sure you choose a medical agent who is good under pressure and who will honor your medical wishes. Your financial agent should be someone who is organized and good with finances. You may choose the same agent for both documents if you wish.