By Liz Behlke
True confession here: I just started working on my Power of Attorney (POA), the document that names a person who can act on my behalf in the event I become incapacitated. It’s easy to understand why I keep putting it off. After all, who wants to think about being incapacitated?
I’m happy to say that my mom already has a Power of Attorney, and that’s a huge relief to me. It specifies who can make decisions if an accident, illness, or aging takes away her ability to manage things herself.
I realize I owe the same peace of mind to my daughter. While I was married I assumed my husband would have the right to speak for me if it was ever necessary. It turns out that’s not entirely true. Now that I’m on my own, I need to be more intentional about documenting my wishes – just in case. It would be a heavy burden for my daughter to suddenly have to deal with my finances and direct my healthcare, but a Power of Attorney removes the legal barriers that could prevent her from doing what needs to be done.
Here’s one way to think about a POA: Laws have been established to protect our healthcare privacy and secure our financial accounts. A POA is the key that can unlock those laws in specific circumstances.
If you don’t have a POA
Without a POA, my daughter may have to go to court to ask for the right to handle my affairs if I’m ever – here’s that word again – incapacitated. This would no doubt be stressful, and it would certainly cost money. It could also delay decision making on my behalf. And, as the world found out in the Free Britney case, a judge then gets to decide who’s going to be appointed as conservator or guardian.
And my situation may be more clear-cut than what other families face. Think about the family with multiple kids who’ve never let go of their childhood resentments. Without a POA, siblings could end up mired in pettiness and suspicion rather than doing what’s best for their parent. Or the family could lose crucial time waiting around for one of them to step up and take charge.
There are a lot of emotional reasons to put off having a POA. But there are plenty of practical reasons to get it done.
Creating a POA is serious business
I think one reason people hesitate on a POA is that it involves some serious decision making. Because it can give someone the right to handle your finances and investments, make decisions about your property, and even direct your medical care, it’s extremely important that you choose a person you trust. This person becomes your agent if you can’t make decisions for yourself.
It may seem natural to select your oldest child or the one who lives close by. But you don’t even have to designate a family member in your POA. You could choose a trusted friend, or even a professional like an attorney. What’s important is that you can trust the person’s integrity and that they have the capabilities to do what needs to be done.
Also keep in mind that you can cancel or change your POA if you feel the person, you originally selected is no longer the best choice.
Types of POAs
Powers of Attorney can cover financial matters, health decisions, or both. A durable Power of Attorney takes effect as soon as the document is signed. One that comes into effect if and when you become incapacitated is called a springing POA. When you talk to your attorney, they can give advice about how many POAs you’ll need and how they should be structured.
You may assume that if you have a Will you don’t need a Power of Attorney. Not likely. Your Will details the distribution of your property after death. A POA makes sure decisions can be made on your behalf during your life.
Creating a POA isn’t difficult. But it can be hard to think about your own potential disability, and who would be the best person to take care of your needs. Establishing a POA is something you do to protect yourself, but you’re also doing it for those you love – so there are no obstacles to helping when the time comes.
Your Arrivity financial planner can connect you with an attorney to help draft your Power of Attorney. Then you can move on to the rest of your to-do list.
Questions to ask yourself:
- Have you talked to your family about your wishes should you become incapacitated?
- Have you thought about who you would trust to make important decisions on your behalf?
- Have you talked to your parents about having a Power of Attorney?
- You can learn more about Powers of Attorney online and even find templates for creating your own. Be sure to select the format that’s specific to your state.
- If your family situation is complicated, you’ll probably want to have an attorney draft your POA. Keep in mind that in most states it needs to be signed in front of witnesses or a notary public.
- Be sure your family or designated agent knows how to locate your POA. It’s a good idea to provide them with copies.
The foregoing content reflects the opinions of Liz Behlke and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.