Assigning a Power of Attorney (POA) is an important step in estate planning. Therefore, to ensure that your wishes are carried out if you become unable to voice them, make certain you choose someone you trust who understands your wishes. Read more to find out what qualities your ideal choice for Power of Attorney should have.
What Is a Power of Attorney?
A power of attorney is a written legal document that grants another individual the authority to act on your behalf concerning legal and financial affairs. Typically, granting someone this authority indicates that you trust them to be your voice if your health prevents you from making your own decisions.
Who Qualifies to be a Power of Attorney?
Many people see the word “attorney” and think that this authority must be granted to a lawyer. In fact, anyone you trust enough to handle your affairs may become your power of attorney. Many married couples designate their spouse, while some individuals may choose to delegate that responsibility to a parent.
Legally, almost anyone qualifies to act on your behalf. However, you should still take care to choose someone who will do a good job.
7 Qualities to Look for in a POA
1. Attention to Detail
Grant power of attorney to an individual who notices the small things. Handling legal matters is best suited to those who are more likely to notice small errors, stipulations, or loopholes in documents or systems.
2. Honesty and Reliability
Naturally, if you choose to grant someone else authority over your money and property, that person should be trustworthy. Grant power of attorney to someone who has proven themselves honest.
3. Proximity
Depending on the situation, your POA may need to show up to a law firm or hospital quickly. Try to pick someone who lives relatively near you. This won’t always be possible but should be considered.
4. Articulate and Assertive
Your POA must be able to act in your interest clearly and with authority. Good speaking skills, as well as confidence, are both excellent qualities of a power of attorney.
5. Legal Knowledge
Since your power of attorney will be dealing with legal matters, it might be helpful if they possess a little bit of legal knowledge.
6. Financial Knowledge
Likewise, granting someone power of attorney means granting them power over your finances. Make sure they handle money well.
7. Loyalty
Choose someone whose loyalty and commitment to your affairs can be entirely trusted. Your POA acts like you, so they should possess a good understanding of your wishes and desires.
Other Tips for Choosing Your POA
In addition to looking for the right characteristics, you should also apply these 3 tips when choosing a power of attorney.
1. Talk to the individual about it.
Of course, the individual has to be willing before you can grant them power of attorney. Discuss the list of responsibilities and make sure your choice is completely on board.
2. Seek advice from a lawyer.
Your lawyer can probably offer you some good insight on who should act as your POA. Don’t be afraid to seek counsel.
3. Don’t choose the person closest to you, but the person who will do the best job.
Just because you’ve been best friends with someone for the last 20 years doesn’t mean they’re right for the job. Remember to evaluate the person’s qualifications as a whole, not just their relationship with you.
Setting Up Power of Attorney: A Comprehensive Guide
Below are considerations to be taken prior to choosing a Power of Attorney:
Drafting the Power of Attorney Document
Once you’ve identified your representative, it’s time to draft the power of attorney document. This legal instrument grants specific powers to your chosen attorney-in-fact, outlining their authority to act on your behalf. You can utilize online resources or seek guidance from an estate planning attorney to ensure the document accurately reflects your intentions and covers all necessary areas.
Exercising Caution in Document Distribution
Exercise caution when distributing copies of the document and storing it securely. Adhere to the “rule of 1-2-3,” retaining one original copy naming both primary and secondary attorneys-in-fact. Store these originals in secure locations such as a fireproof safe, a bank safety deposit box, or with your legal counsel.
Maintaining the Document
Regularly review and update the power of attorney document to keep it current and valid. Life events such as births, deaths, or significant financial changes may necessitate revisions. By keeping the document up-to-date, you ensure that your attorney-in-fact can effectively carry out your wishes.
Considering Durable Power of Attorney
Explore the option of a durable power of attorney, which remains effective even if you become incapacitated. This ensures continuity in decision-making and management of your affairs during challenging circumstances.
Choosing Between Immediate and Springing Power of Attorney
Decide whether your power of attorney will be immediately effective upon signing or triggered by specific conditions, such as incapacitation. An immediate power of attorney grants immediate authority to your chosen representative, while a springing power of attorney only activates under predetermined circumstances.
Deciding Between Limited and General Power of Attorney
Consider the scope of authority needed and choose between limited and general power of attorney. A limited power of attorney grants specific powers for defined tasks or transactions, while a general power of attorney provides broader authority over various aspects of your life.
Incorporating a Medical Power of Attorney
Include a medical power of attorney, or healthcare proxy, to manage healthcare decisions on your behalf. This individual should understand your medical preferences and be trusted to make decisions aligned with your wishes in case you’re unable to do so.
Coordinating Between Power of Attorney and Health Care Proxy
Ensure effective coordination between your power of attorney and healthcare proxy for comprehensive planning. Both documents play vital roles in managing your affairs and safeguarding your interests across various situations.
Conclusion: Ensuring Clarity and Security
By carefully selecting and drafting your power of attorney documents, you establish clarity and security for yourself and your loved ones. Taking proactive steps to set up power of attorney ensures that your wishes are upheld and your affairs managed according to your preferences, providing peace of mind for the future.
