Power of attorney is an estate planning tool that can make it easier for a trusted family member or friend to manage your financial affairs if you become incapacitated.
If you created a power of attorney years ago and haven’t looked at since the ink dried, it’s probably time to review it. As with any estate planning documents, it’s important to evaluate your power of attorney periodically to ensure it’s still meeting your needs. Things change over time, and there may be good reasons to update the document.
In a previous blog post, we shared some important considerations about power of attorney with our readers. That post noted that power of attorney can be a big responsibility. Many people rush through creating powers of attorney without thinking through all of the potential implications of their decisions. That decision can have disastrous consequences.
A recent Forbes article highlighted some of the potential dangers that can come with powers of attorney created without a lot of thought. Those dangers include the following:
1. Appointing a family member based on relationship rather than their ability to do the job effectively.
2. Naming two family members to work together as co-agents. While this can work in certain situations, consider your agents’ ability to act if one of them was traveling or otherwise inaccessible.
3. Not verifying that your power of attorney meets your financial institutions’ needs and requirements.
4. Not requiring any oversight for your agent. This can be accomplished by requiring your agent to provide periodic accountings to another trusted person.
5. A failure to understand that most powers of attorney are effective immediately when signed.
Is your power of attorney up-to-date? We never know when incapacity might strike, so don’t put off reviewing and updating your power of attorney.
Contact us today to discuss your options and to make sure all of your estate planning documents adequately reflect your wishes and goals.