Many people believe that they can avoid appointing others as substitute decision makers until they can no longer make decisions on their own. However, this belief is a common misconception. Like most legal documents, you must be of sound mind when a durable financial power of attorney is created.
If you wait too long, you may lose the ability to choose your own alternate decision maker, called an agent, with a durable power of attorney. Instead, your loved ones may be forced to seek guardianship, which can be an expensive and time-consuming process for them and a more restrictive option for you. Additionally, bills and other financial tasks can pile up during this time, which could lead to even bigger problems. To prevent this, consider drafting a durable power of attorney before you need it, so you will have an agent ready to step up as soon as he or she is needed.
Consider who you trust
If you plan to create a durable power of attorney, it may be valuable for you to consider now who you might choose as your agent. This person should be someone you trust with your financial matters. Often, people choose an adult child, a spouse or a sibling, and many times people will choose an alternate agent, in case the first choice is unavailable at the time his or her help is needed. Sometimes a financial institution can be chosen as an agent instead of a family member.
Typical duties of an agent, include:
- Accessing bank accounts
- Paying bills
- Signing contracts
- Selling property
Acting early has numerous benefits
A durable power of attorney becomes effective when it is signed and remains effective even if you become incapacitated. Although some people bristle at the thought of assigning an alternate decision maker while they are still able to make decisions on their own, this can be beneficial.
Signing a power of attorney does not take away your right to make your own decisions, which means your agent does not have to manage your finances until his or her help is needed. Also, by completing the document while you are still well, you will be able to train your agent to complete tasks the way you like to have them completed, and if there are any difficulties, such as a bank not recognizing your agent’s authority, you will be available to help resolve them.
There is no way to predict what the future may hold. However, you can prepare for some possible future events. A durable power of attorney provides one way to ensure your finances will be managed, even if you are unable to do so yourself.