Choosing a power of attorney (POA) is a significant decision that involves legally appointing someone to make financial, legal, or healthcare decisions on your behalf if you’re unable to do so yourself. Whether you're preparing for unexpected circumstances, advancing in age, or planning for the future, here are key tips to guide you in choosing the right power of attorney:
1. Understand the Types of Power of Attorney
General Power of Attorney: Grants broad authority over your financial and legal matters, which ends if you become incapacitated.
Durable Power of Attorney: Continues to be in effect if you become incapacitated, making it a popular choice for long-term planning.
Limited (or Special) Power of Attorney: Grants authority for specific tasks, like handling a real estate sale or managing an investment account, and is often time-limited.
Healthcare Power of Attorney: Specifically allows someone to make medical decisions on your behalf if you cannot communicate your wishes.
Choosing the right type of POA ensures that the person you appoint has the authority to handle the responsibilities you envision without overstepping.
2. Consider the Characteristics of a Reliable Agent
Trustworthiness: This is the most critical trait, as they will manage sensitive decisions about your finances, health, or property.
Reliability: Your POA agent should be dependable and willing to fulfill these responsibilities with consistency, even during potentially challenging situations.
Strong Decision-Making Skills: Look for someone who can think clearly and make decisions in your best interest, even under pressure.
3. Evaluate Their Financial and Legal Knowledge
Financial Expertise: For financial POAs, select someone who understands money management, taxes, and investments. They should be comfortable making decisions about finances and prepared to keep detailed records.
Legal Acumen: While they don’t need to be lawyers, understanding legal responsibilities is helpful, especially if they’ll be involved in managing property, legal documents, or healthcare directives.
Healthcare Knowledge for Medical POAs: If appointing a healthcare POA, ensure they understand your medical preferences and are comfortable discussing them with healthcare providers.
4. Discuss Your Preferences and Boundaries
Be Clear About Your Expectations: Having open conversations about your wishes helps them understand your needs, reducing uncertainty and potential conflict.
Define Their Role Clearly: Specify the kinds of decisions you expect them to handle, such as financial transactions, medical choices, or property management.
Include Instructions in Your POA Document: You can add specific instructions in your POA document to provide additional guidance and ensure they make choices that align with your values.
5. Consider Family Dynamics
Evaluate Family Members Objectively: Choosing a family member might seem natural, but consider whether they can handle the role objectively and responsibly.
Avoid Appointing Multiple Agents to Avoid Conflicts: While it’s possible to name more than one agent, this can complicate decision-making. If you do appoint multiple agents, specify whether they must agree on decisions or if each has individual authority.
Choose Someone Who Can Work with Other Family Members: If family communication is important to you, select someone who can work smoothly with other relatives to avoid misunderstandings.
6. Appoint a Backup Agent
Plan for Contingencies: Circumstances change, and the person you choose may not be available when needed. Appointing a backup agent ensures your interests are protected no matter what.
Discuss Your Choice with Your Backup: Make sure your alternate agent understands their potential responsibilities and feels prepared to step in if necessary.
7. Consult with a Legal Professional
Ensure Legal Compliance: Laws governing powers of attorney vary by state, so it’s wise to consult with an attorney to ensure that your POA document meets all legal requirements.
Incorporate Your Wishes into Legal Wording: A lawyer can help ensure that your document clearly reflects your wishes and includes any limitations or special instructions you want to add.
Keep Your POA Updated: Periodically review your POA document with your attorney to ensure it still aligns with your current wishes and that your agent remains the best choice.
8. Reassess as Needed
Check-in Regularly: Life changes, so periodically reassess your POA choice, especially if your agent's circumstances, your relationship, or your own needs have changed.
Adjust for Major Life Changes: If your POA agent experiences life events that impact their availability or willingness to serve (such as a new job, health issue, or relocation), you may want to select a new agent.
Final Thoughts
Choosing a power of attorney is an essential step in your life and estate planning. By carefully considering your options and communicating openly with the person you choose, you can ensure that your financial, legal, and health decisions will be handled by someone who understands your wishes and respects your values. Taking the time to make an informed decision will give you and your loved ones confidence and peace of mind in knowing that your affairs will be managed according to your desires.