Perhaps you have heard of a power of attorney, but are not entirely sure what it is and whether you need one. A power of attorney allows you to legally designate another person as your agent, (also known as a co-agent or successor agent). Once designated, that person can handle your financial and legal matters in the event you become incapacitated. There are several basic types of power of attorney document:
- A durable power of attorney allows the person you designate, the ability and right to handle your financial and business matters on your behalf. As soon as you sign the form, a durable power of attorney goes into effect, and remains in effect until you revoke it.
- A contingent (also called a springing) power of attorney only becomes active when you become incapacitated, and lasts the duration of your incapacitation. You can revoke any of these power of attorney designations at any time.
Who Should You Choose for Your Agent?
Many people choose both their spouse and a close relative as an agent, in the event both spouses are involved in an accident. If you decide to choose a family member as your agent, it is important he or she lives at least somewhat close to you, in order to handle your business matters and to ensure familiarity with local and state laws applying to your business endeavors. Although some people appoint one or more of their children, think carefully about having your children act as your agents.
Just because your children have grown up, does not necessarily mean they are able to agree on issues regarding your care or finances and get along with one another in the process. If you are set on appointing your children as agents, consider appointing one to handle your financial transactions and another to handle your health care transactions—but make sure you are certain they will not let their sibling rivalries get in the way of what needs to be done as your agent.
The Five Things To Consider When Choosing Your Power of Attorney
So, now that you know why you need a power of attorney, and who you can possibly choose to fill the role of agent, here are five things you should think about when making the important decision as to who will serve as your agent.
- What is the relationship of the person you are considering as your agent with your other loved ones? Will that person have a difficult time dealing with your spouse, your children, other family members? If that person is a spouse or child, can they carry out your wishes, despite what other family members may want them to do?
- Does the person you are considering have a spouse who supports their decisions, or will that spouse try to control their actions regarding the decisions that need to be made for you?
- Does the person you are considering as your agent have problem-solving skills? Is he or she able to compromise when necessary, but stand firm on your wishes?
- Does the person you are considering as your agent have the ability and the desire to ensure your needs and wishes come first—above their own financial issues or personal beliefs—when making decisions regarding your care?
- If the person you are considering as agent will eventually inherit from your estate, does it make sense to put that person in charge of managing your finances and your care?
If you are having trouble deciding on an agent for your power of attorney, consider speaking to an experienced Virginia estate planning attorney. Your estate planning attorney has the necessary knowledge and skills to explain everything you need to understand, and help you make the right choices.