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Why You Need a Power of Attorney

Estate Planners | Monday, December 13th, 2010

If you’re like most folks, you think of a power of attorney (POA) as being someone that is designated to carry out your wishes and stand in your stead when you’re really ill. In actuality, waiting until you are sick or incapacitated to make an important decision like selecting a power of attorney is foolhardy at best – and disastrous at worst. The power of attorney is the person that you select to make financial, legal and medical decisions on your behalf while you are alive. After you die, your last will and testament will take effect and the power of attorney will no longer be valid. A power of attorney can be changed at any time, and you can also choose to make someone your power of attorney on a temporary basis. But it is always smart to designate your power of attorney while you are in good health as this will ensure that your assets and your rights are protected should you become ill. Many seniors sign a power of attorney to grant authority to someone that they trust to handle their finances and banking, and to make other decisions regarding their money. But you do not have to be a senior to need a power of attorney. All adults should designate a power of attorney to handle the “what ifs” in life.

Selecting a Power of Attorney

Obviously, the person that you select as your power of attorney should be someone that you trust. This can be your spouse, child, parent, or other family member, or it can be a friend or even an attorney. As a good rule of thumb, ask yourself if you would be comfortable giving the selected person blank checks to your banking accounts. If not, they may not be the right person for the job as in essence, the person you choose will have access to your money. You can also give power of attorney rights to more than one person, which is sometimes the best option. When doing so, you can elect to have the two people (or more) act together when making decisions, like signing a withdrawal from your bank, or you can give separate powers to each. Keep in mind when selecting a power of attorney that no one will supervise the person that you select, which makes the role of power of attorney open to abuse and misuse. For this reason, selecting a person that you highly trust is of the utmost importance.

Revoking a Power of Attorney

The person that you select to give power of attorney to is known as your agent, or sometimes, your attorney-in fact. The power of attorney rights will remain in effect unless they are revoked or cancelled in writing. If you appoint a power of attorney and then discover that you no longer trust the person you selected or wish to choose another person, or none at all, you can do so at any time by signing a revocation of power of attorney and sending it to the agent, advising him or her that he or she no longer has power of attorney over you. This revocation must also be sent to anyone else, including your bank that has relied on the power of attorney relationship that had been established. If you filed your power of attorney with your local county clerk, you will also need to file the revocation of power of attorney with the clerk.

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