One of the most common estate planning documents is called a power of attorney. Powers of attorney can be drafted to grant another person the legal authority to make decisions on your behalf. They can be made to broadly apply to all areas of your life, or they can be made more specifically -- to only apply to certain areas of your life and only in the event that specific conditions are present. Three of the most common kinds of powers of attorney include medical or health care powers of attorney, financial powers of attorney and in loco parentis.
With a medical or health care power of attorney, you will grant an agent the power to make medical decisions on your behalf. Generally, these documents are made to go into effect in the event of your mental or physical incapacitation. The documents can include specific language that identifies a particular doctor who must certify your state of incapacitation before it goes into effect as well.
As for a financial power of attorney, this document is similar to the health care power of attorney, but in this case, the document specifically applies to your financial affairs. You might indicate that the same person will have power of over your financial affairs and medical affairs in case of your incapacitation, but this will need to be achieved through two separate documents. Financial affairs include home sales, bill paying, banking transactions, investment transactions, litigation decisions, taxes and other financial issues.
In loco parentis refers to a document that provides parenting authorities to a temporary guardian who will care for your child. An in loco parentis will generally go into effect in the event that you suffer a serious medical problem -- or other kinds of situations -- where you cannot be present to care for your child. These documents usually expire after a year, but they can be continually renewed. They can be very helpful to have on file, especially if you are the sole caregiver of your children, but it is a good idea for all parents to have such provisions set up.
Source: PacificDailyNews, "Power of attorney vs. living will," Michael Camacho, Sep. 27, 2015