It took years, maybe decades, to create the life you have now. All your aspirations, hard work and commitment has produced assets in which you want to protect. Now is the time to think about how your assets will be handled once you’re gone, or unable to make important decisions. Who will act on your behalf? That’s quite a role to fill.
Why is a power of attorney important?
The main focus of estate planning is to protect your family and assets. When you assign a person to be your power of attorney, you are essentially giving them control of your legacy.
There’s a lot on the line when it comes to your finances. That is why wills, trusts and business succession plans help give people peace of mind. A power of attorney comes into the picture when you are unable to make sound personal or financial decisions. It’s extremely important that this designated person understands and upholds your wishes.
A power of attorney handles a variety of assignments depending on your permissions, which includes:
- Hiring legal counsel on your behalf
- Selling or transferring property on your behalf
- Dealing with bank transactions and interest payments
- Paying for your day-to-day expenses
- Handling small business operations
How do I choose the right person?
There are different types of power of attorney designations available. A financial power of attorney handles the financial responsibilities in your absence, while a medical power of attorney ensures your medical preferences are granted. A durable power of attorney can assume both responsibilities. Regardless, every individual has unique needs and can design their estate plan to fit.
Trust is a vital part of the decision-making process. You want to be sure the person you choose has your best interests in mind. However, don’t let emotions be the only determining factor. Think realistically and logically. There are some key characteristics to consider before making a final pick, such as:
- Commitment: This person is loyal. They understand their duties and take them seriously. They are known to follow through and keep their promises.
- Responsibility: Not only does this individual make good personal life choices, but they handle their finances responsibly. They are careful when spending money and don’t act impulsively.
- Compatibility: This person gets along with all your family members. You never have to worry about a conflict of interest. They treat your loved ones with equal kindness and compassion.
- Detail-oriented: They should inherently have an attention to detail. A list of tasks does not overwhelm them. They stay calm and collected.
It’s important to remember that you might love someone, but their personality and values don’t align with role. Before you make any decisions, have an honest conversation with the person in mind. They will also need to put careful thought into accepting the job.