Considering powers of attorney is a critical component of your estate planning process. Powers of attorney are legal documents that give another person permission to act on your behalf if you cannot make decisions yourself.
Powers of attorney can name different people for financial and medical decisions.
The risks of POA documents
A POA can be general or durable. A general POA ends if you become incapacitated, but a durable POA remains in place if you cannot make decisions. The agent or agents you choose to make decisions on your behalf have a lot of power. An abusive agent may use the money for his or her benefit or pressure you into handing over more power than you want.
The due diligence necessary for POA
When naming someone to handle your affairs, be careful who you choose. If someone attempts to become your new best friend or has a sudden interest in your affairs, be critical of the interest. When someone seems too good to be true, you should worry that it may be the case. Discuss your choices with close friends and family to obtain advice and keep others aware of the situation. Your close friends and family will look out for you regarding decisions your agent makes on your behalf.
You do not have to appoint a single person to make your decision. Instead, name someone for your agent to report to after making significant decisions about your finances or healthcare. If you name someone an agent and have second thoughts, you have the right to change it.