Selecting an agent for power of attorney might seem simple until you really consider the documentation. The right person to potentially manage your finances, the person you always consider an obvious candidate, might not ultimately be right for this role. Speaking with your financial advisor and estate lawyer about this element of estate planning will help you make a designation you’re comfortable with now and for the future.
Understanding Different Types of Power of Attorney
There are different types of power of attorney, and while you do not need each document as part of your estate planning or as part of your financial interests, each element does come with the naming of a designated agent who is given the power to make decisions on your behalf. Here are the most common powers of attorney:
- Limited. Agent represents you in financial matters in a document also known as financial power of attorney.
- Durable. One person makes financial-related decisions on your behalf if you become incapacitated and unable to act.
- Non-durable. Your financial advisor manages a one-time task for a brief period to achieve a specific, agreed-upon financial goal.
- General. One person makes all decisions – financial, business, legal, and health – with some limitations.
- Medical. An agent is identified to make medical decisions on your behalf if you cannot regarding treatment, surgery, and end-of-life care.
Tips to Choose Your Power of Attorney
A power of attorney document authorizes a trusted person to make decisions for you while you are still alive. Upon a person’s death, the representative no longer has authority to make decisions for you or your estate. Ideally, the agent follows your instructions, but if you leave your estate planning documents open-ended, there could be room for interpretation that negatively impacts your financial future and the future of your family. Some factors to keep in mind:
- You trust your family, likely some more than others, but is there a family member who is capable and able to minimize the emotional aspects of their calling to manage your needs when you cannot?
- It may be necessary to name a hierarchy of power of attorney candidates should your first choice be unable to fulfill the duty or turn the job down.
- Thinking about being incapacitated and unable to tend to your finances is a frightening thought, but having a backup plan should you be compromised will be a relief when it comes to making the big decisions.
Get Power of Attorney Support from Your Financial Advisor
Working with your financial advisor and estate lawyer is the best way to develop estate planning documents that accurately represent your wishes. The power of attorney will be discussed in depth, and it will be made clear how and when the named agent can act. These safeguards will help protect your assets, business holdings, lifestyle, and more so it continues as you want it.
Contact Hollander Lone Maxbauer in Southfield, MI, to discuss your estate planning and power of attorney documentation.
