Powers of attorney are a wonderful tool in the hands of a trustworthy person. But because it comes with a tremendous responsibility, it can also be a dangerous tool in the hands of the wrong person.
Learn all you can before choosing your power of attorney. We have had too many cases where the wrong choice resulted in exploitation or abuse by a family member or friend.
What is a power of attorney?
A power of attorney is a document where you authorize someone, often called an agent, to act on your behalf should you no longer be able to do so. Examples include paying your bills, managing your investments.
It can be limited to one decision or it can be so broadly written that the agent can do almost anything on your behalf. The authority you give is dependent upon the document’s language.
There are 2 types of powers of attorney:
- A non-durable power of attorney (which may be tailored to permit your agent to complete a single transaction) ceases when you lose mental capacity.
- A durable power of attorney stays in effect if you experience diminished capacity or become unable to manage your own affairs.
Either type of power of attorney may be tailored to give your agent very broad authority, or permit your agent to complete a single transaction.
To hear more about the difference between a power of attorney and a durable power of attorney, click here.
Who should you choose?
Since your power of attorney potentially will be handling your legal and financial affairs, you’ll want to choose someone who either has some experience in these fields or has the personality and financial savvy to handle the decisions that may fall to him or her.
Choose someone who:
- Is trustworthy and fair minded
- Understands his or her duties, and a commitment to taking those duties seriously
- Understands your wishes and your values
- Demonstrates loyalty – to you
Never forget that you’re giving your agent the opportunity to access your checking and savings accounts and other assets, at a time when you may not be able to keep tabs on what the agent is doing. We have seen the child, step-son, nephew, niece, and the family friend utilize a power of attorney, not for the principal’s benefit, but for their own.
Choose your agent wisely, and make sure you understand the breadth and scope of the powers you are giving. There will be comfort in knowing that your wishes will be protected.