Since a power of attorney (POA) enables someone to make legal and financial decisions on your behalf, you’ll want to choose someone who either has some experience in these fields, or has the necessary qualities to handle the decisions.
Reasons for naming a power of attorney
A power of attorney is generally either for a specific purpose (for example, giving someone else power to sign a document when you cannot be present to sign) or as protection in case you become incapacitated or incompetent.
A POA for financial matters can make your trusted representative responsible for the following …
• Bill paying.
• Banking transactions.
• Investments, including the management or sale of any stocks or bonds.
• Managing or selling real estate.
• Managing insurance, including overseeing the payment of any premiums.
• Preparing and filing tax returns.
Characteristics you should seek
• Attention to detail.
• An understanding of the duties required and a commitment to taking those duties seriously.
• An understanding of finances and perhaps business.
• The ability to collaborate with attorneys, accountants, and other parties, if necessary.
The person you designate as holding power of attorney could be a relative, advisor, or someone else, but it should be someone you trust, who you believe understands your values, and will act in your best financial and legal interest.
If you have extensive business interests, it may help if the person you’re appointing to hold power of attorney has an understanding of your business interests as well as the finances and financial structures behind those businesses.
Finding the right person for the job
If you’re considering naming someone to the POA but aren’t sure if that someone is right for the job, it might be helpful to have a conversation with the person and discuss the duties and responsibilities of the position, as well as the scope of your financial and legal affairs. This may help to determine if the person you’re considering is right for the job.
Things to Consider:
- Attention to detail and an understanding of your financial landscape are vital characteristics for the person you choose to have power of attorney.
- Never grant someone power of attorney out of obligation; always choose a person you trust and will get the job done right.
- Make sure you choose the right type of power of attorney for your specific situation, be it “durable” or limited.”
- You can name a power of attorney using a legal website; for better peace of mind you may want to hire an attorney.
This article is provided by Everplans — a life and legacy planning company dedicated to transforming the way people get their families organized. For more information, visit: everplans.com
Neither Transamerica nor its agents or representatives may provide tax, investment, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.