Power of Attorney Tips
None of us likes to think about the possibility of something happening that might prevent us from managing our own finances, but it does happen. If you are ill, incapacitated, or just out of the country, you might need someone else to manage your money for a while.
It can happen to anyone. Sarah was fit and healthy at 52 when she was involved in a serious car accident. It happened in an instant, and she was in hospital for five months. Suddenly, her sons had to make decisions about her health and her money. A Power of Attorney can make this situation a lot easier.
What is a Power of Attorney?
It’s a legal document that you sign to give someone else, someone you trust implicitly, the authority to make decisions on your behalf. The document will state exactly what legal rights the person will have and what decisions they are able to make for you. In many states, the document has to be notarized, witnessed, and signed.
Power of Attorney Tips
- Do you really need a POA? Don’t let anyone pressure you into signing a POA. Take your time, and look at all the angles. Perhaps you’re going to have lengthy medical treatment, and you don’t want to have the burden of financial and investment decisions during this time. Decide if your situation warrants a POA.
- Make it a Durable POA. This means that in the event that you do become incapacitated, someone already has the right to act on your behalf. If you don’t have this in place, it can require a court action to get this done, which can be time-consuming and expensive. This would have been very helpful to Sarah’s sons when she had her car accident.
- Who to pick for the Power of Attorney. It must be someone you trust and someone with enough knowledge to be able to manage your affairs and your finances. Discuss the responsibilities with this person, so that you can establish that they are willing and able to do the job.
- List specific duties. Be very clear about the authority you are granting. It might include certain investments and accounts, but not others. State whether the POA includes designating beneficiaries.
- Check the legal requirements of your state. Each state is different, so make sure you have the right content in your POA.
- Have each page notarized and signed. That keeps the entire document safe and secure. No pages can be taken out or replaced.
A Power of Attorney is one of the documents along with a will and an advanced healthcare directive that everyone should have in place in case of emergencies.
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