A power of attorney gives another person — an agent — the authority to act on your behalf in legal and financial matters. Choosing your agent is no simple task, but it is an important one for anyone wanting to plan for their future during the estate planning process.
When is a power of attorney necessary?
A power of attorney is beneficial in times when you are no longer capable of making your own legal and financial decisions. This may be to due illness or mental incapacitation. It’s almost always better to choose your power of attorney sooner rather than later to ensure that your personal, financial and legal matters are in good hands. You cannot assign a power of attorney after you are already incapacitated or deemed legally incompetent.
What types of powers of attorney are there?
The type of power of attorney you need will depend on your particular circumstances. Their duties can be as general or specific as your needs require them to be. Specific types of powers of attorney include:
Financial power of attorney — Allows someone to manage your money if you are unable to manage it yourself.
Heath care power of attorney — Gives someone the authority to make health care decisions for you should you become incapacitated.
Child care power of attorney — Authorizes someone to decide on child care-related matters, such as school enrollment or medical emergency treatment.
Who can serve as a power of attorney?
Family members, friends and even accountants or lawyers can serve as your agent. Whoever your choice is, it’s important that they are trusted and experienced enough to handle their responsibilities. You may also consider choosing someone who is loyal, organized, fair-minded and understanding of your instructions and wishes.
Can I have more than one power of attorney?
The simple answer is yes, you can have more than one power of attorney. A person might be well-equipped to handle your finances, but inexperienced in making health care decisions. Having multiple powers of attorney can ensure that you have all your bases covered.
You will, however, have to decide whether or not your agents must act jointly in any decision-making processes. If they must, it’s important to consider whether they will be able to work together, or if scheduling or disputes might get in the way.
Protect yourself with a power of attorney
A power of attorney can provide invaluable assistance to you and your loved ones when you need it most. Life can be unpredictable, and a power of attorney can help you protect your assets and wishes when you are unable to manage them yourself.