If you do not have a power of attorney, you can face some real challenges.
People, especially seniors, often fear that if they create a power of attorney, they have lost control and are more vulnerable to being exploited. However, that does not have to be the case, according to the Daily Local News in “How to stay in control when appointing a power of attorney.”
On one hand, without having a signed power of attorney, which is relatively simple to obtain from an estate planning attorney, the family may be faced with going to court to file for guardianship.
Guardianship is expensive, time consuming, can limit the individual’s freedom and may even result in an appointment of someone the person does not want to be their guardian. There are some instances where guardianship is necessary.
On the other hand, the seniors who believe that a power of attorney is a powerful document that requires careful consideration, are right to give it the thoughtfulness this document deserves.
Here’s how to maintain some measure of control, while having a power of attorney:
Be certain about the agent you name. This is not a role for someone you recently met who feels like an old friend. It must be someone you would easily trust with your entire life savings, without a second thought. You need to be 100% sure that the person would act responsibly, in your best interests, following through in paying bills, consulting with experts when necessary, keeping records and being scrupulously honest and putting your interest first in everything they do.
Don’t name someone just because they are your oldest child and someone’s feelings would be hurt. If a person has money problems themselves, that person is not a good candidate for this role.
Have a backup. Or two. If your primary “attorney in fact” is unable or unwilling to act on your behalf, have a second person, or even a third, ready to act.
Ask your estate planning attorney to create documents that work for you. There are forms you can use, but they may not be appropriate for your situation. Your best bet is to have an attorney prepare a power of attorney document that meets your needs. For instance, you may not want to give someone unlimited power, or you may want to give them power to do everything but gift assets. You might want to give them the ability to cash in insurance policies for your medical expenses, but not to change the beneficiaries on your insurance policies.
If you want two agents to act together, you need to know whether your bank, brokerage house, financial institution or financial advisor will accept two. Will they be able to work together?
Separate financial power of attorney and health care power of attorney. One person does not need to handle all your tasks. One of your children is great in crisis situations, while another is good at finances. Divide up the tasks, so that each can participate in decision making, in different areas.
Who needs to know about your power of attorney? It’s best if all your children know if one of them has been named attorney in fact and others have not. They will find out eventually, and it may be better, even if there is some grumbling, for them to know in advance of a crisis.
Fire at will. You retain the right to fire your agent(s), by serving them with a revocation or by appointing another attorney in fact. If the family is not getting along and things have turned ugly, speak with your estate planning attorney to ensure that the proper protections are in place.
Reference: Daily Local News (June 11, 2019) “How to stay in control when appointing a power of attorney”