By Attorney Robert T. Brooks on Wednesday, January 16, 2019
We all like to think that we will remain healthy and capable of handling our own affairs. But what happens when the unexpected accident occurs, and your family is left dealing with the aftermath. Who can handle the utility accounts, investments, bank accounts, and other assets that are solely in your name?
Most people have heard the term “Power of Attorney”, but do you really know what a Power of Attorney is, how it could benefit you, or how it could possibly hurt you if entrusted to the wrong person?
When most clients are asked what a Power of Attorney is their response is usually that it is a document that allows someone to manage their affairs if they are unable to. Although that is true, it is important to understand that a Power of Attorney is much more powerful than that.
A Power of Attorney allows you to choose an Agent to act on your behalf. It can be as broad or as limiting as you choose. It can be effective the moment you sign it or only upon a certain event occurring, for example you becoming incapacitated.
Having the needed powers included in your Power of Attorney is extremely important, but so is choosing the best Agent to act on your behalf, because typically there is no direct oversight into the actions of your Agent. In general, your Agent shall act only in your best interest and keep records of the actions or transactions they have taken as your Agent. The individual or individuals you choose to be your Power of Attorney Agent should be extremely trustworthy and financially responsible. Choosing an Agent can be a difficult choice, because although you love your child, family member, or close friend, if they cannot manage their own finances appropriately, how can they be expected to handle yours?
A common misconception is that once you sign a Power of Attorney you lose the ability to manage your own affairs. This is not true. If you are competent you still have the right to make any decision and control your finances as you desire. While you are competent your Agent should not typically take any actions unless you have requested them to, and if they do, you have the ability to revoke or amend the Power of Attorney.
The biggest benefit of the Power of Attorney comes when you are not competent or unable to handle your own affairs. At that time your Agent will be able to protect you and your assets according to the powers you have granted them in the Power of Attorney, without the need of a lengthy court proceeding.
Having a properly drafted Power of Attorney, taking into consideration what assets you have and what needs may arise in the future, can save your finances and your family additional heartache when the unexpected occurs.
If you want a Power of Attorney or have further questions concerning a Power of Attorney or other estate planning documents, please contact The Heritage Law Group to see how we may be able to help you.