Managing medical finances can be challenging, and you won’t always be able to handle them on your own. There are plenty of ways to hand over the power to act on your behalf, but knowing which to utilize can be a tough decision.
Joint accounts and durable power of attorney are two popular options to consider when planning for uncertainty. While they can overlap in places, the authority and allowances can differ significantly between the two.
Two people usually control joint accounts, bothof whom have equal control. This can make it easier to share your finances with someone in charge of paying your bills or handling medical costs. Either party can perform actions like transferring or removing money or closing the account without authorization from the other participants.
Durable power of attorney
Naming someone with durable power of attorney means they’reable to make decisions on your behalf if you become incapacitated. This is the more flexible of the two options, as you are usually able to adjust just how much authority you cede. You can offer a wealth of freedom to your acting agent, or severely limit their abilities, depending on your needs.
Picking a path
Comparing the two depends mostly on the scope you’ll allow in your durable power of attorney. It’s generally up to you to define the parameters, but if you let them, your stand-in can make important binding medical and financial decisions on your behalf. Being named on a joint account gives the other party unfettered access to your accounts, but they may not be able to make any serious decisions.
Also, their access to your account through joint-naming means you may have more trouble pursuing them for wantonly using the funds. A thoroughly outlined power of attorney agreement that provides stricter guidelines may give clearer recourse to undo missteps or fraudulent acts.
You’ll have to think hard about how much authority you want to hand out, and under what circumstances you want appointees to act in your place. The right choice can make all the difference when deciding a plan for the future.