While you may have enjoyed a healthy life so far, you probably recognize the frailties of the human body. Whether due to age, illness or injury, you may have difficulty making important decisions without some assistance. Even worse, you may eventually become incapable of making decisions altogether.
A power of attorney is someone you designate to make legal and financial decisions if you cannot do so yourself. Simply put, choosing a POA is an important part of your overall estate plan. You should realize, though, that some individuals do a better job than others. Here are three qualities that your POA should probably have:
1. Understanding
Many financial and legal decisions have the potential to cause serious consequences. Therefore, you do not want to designate a POA who does not take the role seriously. On the contrary, you want your designee to have both a firm understanding of his or her obligations and a healthy respect for them.
2. Competence
Financial and legal matters can be extraordinarily complex. While you do not necessarily need to find a POA who has a legal or accounting background, you should designate a competent person. More importantly, you want your POA to pay careful attention to details, privacy, deadlines and other sensitive matters.
3. Communication
If you cannot make your own decisions, your POA must step into your shoes. Of course, reaching the right conclusion may involve talking to attorneys, financial advisors, physicians, family members, friends and others. Therefore, your POA should have no qualms about having meaningful discussions or setting reasonable boundaries.
In the first few months of any new year, it is important to review your estate plan. If you have not yet designated a POA, finding the right person for the job may be on your priority list. On the other hand, if you already have a POA, reevaluating the arrangement is a good idea. Either way, you must understand what usually makes a good POA.
