A comprehensive estate plan should include a power of attorney. It grants someone the authority to make decisions on your behalf if you become incapacitated.
When creating a POA, there are several important elements to consider as you protect your interests.
1. Choosing the right agent
Choosing the right agent for your power of attorney is important. This should be someone you trust implicitly, such as a family member or close friend. They should be responsible, organized and capable of making difficult decisions under pressure.
2. Determining the scope of authority
You can choose to create a general POA, which gives your agent broad powers to manage your affairs, or a limited POA, which restricts their authority to specific tasks or transactions. Consider your circumstances and the level of control you wish to maintain.
3. Deciding on durability
A durable POA remains in effect even if you become incapacitated, while a non-durable POA terminates upon incapacitation. In most cases, a durable POA is preferable, as it ensures your agent can continue to manage your affairs if you become unable to do so yourself.
4. Safeguarding your POA
To prevent misuse, consider including safeguards in your POA, such as requiring your agent to provide regular accounting or limiting their ability to make substantial gifts or changes to your estate plan without additional approval.
The right power of attorney designation gives you peace of mind when faced with the unexpected. Consider these factors as you draft your power of attorney during the estate planning process. That way, you can be confident in your selection and the authority they receive.
