Make careful decisions when creating a power of attorney

On Behalf of | Aug 19, 2020 | Estate Planning

Creating a power of attorney is a good idea not just for the elderly but also for the middle-aged as well as for young people with growing families to care for.

However, as the principal, you need to appoint someone trustworthy who can act on your behalf. Consider carefully as this is sometimes easier said than done.

Why a power of attorney

A power of attorney enables the person of your choice to manage your healthcare decisions and your financial affairs if you cannot do so. You might become incapacitated due to an accident or become mentally incompetent as you grow older. Creating a POA for medical care and a POA for finances will give you peace of mind.

The springing POA

A third option is a springing POA. You will appoint your agent but the POA will not go into effect until such time as you become incapacitated. This is the tricky part. You must be extremely careful in specifying the type of event that will allow your agent to step in and act on your behalf. The kind of incapacitation must be absolutely clear, or the court might have to sort out questions either about your competency or the ability of your agent to carry out his or her responsibilities.

Planning ahead

Keep in mind that you should create your POAs well in advance of the possibility of a dementia diagnosis. Remember that although the springing POA only becomes effective under special circumstances, a durable POA goes into effect upon signing. Your agent can then make decisions on your behalf relative to any matters addressed in the document.