There is a lot of power in having a Power of Attorney when you need it. Just make sure you give that power to someone you absolutely trust!
The Power of a Power of Attorney
It is important for elders and their family members to make sure all financial and legal affairs are in order to protect their finances, their home, and their assets. It is essential to learn how important these legal documents are and how to be protected from being financially exploited before they sign on the bottom line and give someone complete control of their assets.
What is a Power of Attorney
Financial Power of Attorney
This document gives another person (your agent) the authority to manage your finances and property and to transact business on your behalf. An agent may not override your wishes and must make decisions that are in your best interest. A financial Power of Attorney normally goes into effect as soon as you sign it allowing your agent to conduct your financial affairs immediately. A financial Power of Attorney can also be made for the future only if you are incapacitated.
Limited Power of Attorney
This document gives the agent legal authority to perform only limited tasks on your behalf, but does not give him or her complete control over your financial matters. For example, you can give your agent the authority to cash your checks, but limit him or her to other powers over your assets.
Healthcare Power of Attorney
With a Healthcare Power of Attorney, you appoint an agent to make medical decisions on your behalf. It goes into effect only if you become incapacitated. By preparing this document in advance, you can decide who will make your medical decisions.
Things to Consider to Protect Yourself
Choose your Agent carefully
Only appoint someone as your agent if you know that you can absolutely trust him or her to make good decisions about your finances, health, and assets.
Consider getting legal advice first
An attorney can counsel you on the different ways the documents can be set up to meet your needs, and perhaps avoid financial exploitation.
Consider establishing oversight
For example, you may want to include a statement of your agent’s fiduciary duty in your legal document and require your agent to sign the document which acknowledges his or her acceptance of the fiduciary duty. Also, you may want to require your agent to send regular accountings to another person or persons.
Understand you can change your mind
If you decide to change who you appointed as your agent, you can revoke the document as long as you are mentally capable of understanding your decision.