Choosing a power of attorney can be a difficult process, but it’s an important part of lifetime planning and can help to protect your assets later in life. Here’s our guide to help you choose your power of attorney.
What Is a Power of Attorney?
Assigning a power of attorney is the act of appointing someone to act on your behalf in regards to legal, financial, or other important matters. This person can be a family member or another trustworthy individual who can act on your behalf if you’re unable to for reasons including being afflicted by a disease or being on military service.
A power of attorney can be effective immediately or at a future point when you’re unable to manage your affairs. Power of attorney also gives the assignee authority to make decisions in regard to your health, property, and other legal affairs. If you’re suddenly incapacitated without a power of attorney, it could cost a loved one $2,500-$5,000 to petition to be appointed as your guardian.
Who Should Be Your Agent?
The person appointed as your power of attorney is typically referred to as an agent. When it comes to choosing an agent, the only regulations are that the person can’t be a minor and must not be otherwise incapacitated. Many people choose a family member such as their spouse or children. Multiple agents may be appointed but it’s important to know that not everyone may be available to act when needed and they might disagree with one another.
If you choose to have multiple agents, you need to indicate if you want a majority rules clause. This means if the majority of your agents agree on a decision and are present, they can act without having to wait on other agents who aren’t present or who disagree. The bottom line is that you should choose someone with integrity who you trust. Before appointing someone as your power of attorney, make sure you have a conversation with them and ask if they’re willing and able to take on this important role.
How Should Your Agent Sign?
If John Smith had appointed his wife, Jane Smith, as his power of attorney, she would sign any legal document as follows: “John Smith, by Jane Smith under POA” or “Jane Smith, attorney-in-fact for John Smith.” Before an agent takes action, they should always consult with an attorney first to confirm the actions they can and can’t take, and if there are any preventative measures that should be taken to minimize the likelihood of anyone challenging these actions.
Will My Power of Attorney Expire?
Depending on state regulations, you may be required to renew your power of attorney; however, most states allow a “durable” power of attorney, meaning that a power of attorney is valid until death or the document is revoked. It’s important to periodically review these documents every 2-3 years with your lawyer to ensure that your agent is meeting your needs and acting in your best interest.
Have you talked to your loved ones about choosing a power of attorney? Start the conversation today to ensure that your assets are adequately protected. For more information on how our helpful staff can help you get peace of mind and address future care needs, visit us online or give us a call at (516) 496-1505.