We never want to face the day where we can’t handle our own finances. But, planning can be done to make that process as smooth as possible for your loved ones. For example, a General Durable Power of Attorney names someone (referred to as “Agent”) to handle your financial affairs. Consider these tips for creating, using, and updating your power of attorney document.
1. Only name someone you trust. This sounds so simple it shouldn’t have to be said. But, some people don’t have multiple children to choose from or family and friends trustworthy of the task. Think very carefully before appointing someone to handle your financial affairs. If you have any concerns they might misuse your money then dig deeper and consider a professional fiduciary.
2. Don’t choose your agent based on birth order. It’s very common for parents to name their oldest child to make financial decisions when they aren’t able to. The first-born child “may” be the right person for the job, but don’t let birth order dictate who should serve in this role. Name the child who is the most financially responsible, who will be around to help you on a day-to-day basis, and who can keep peace in the family. This child is likely the better selection (even if this happens to be the middle or youngest child).
3. Fight back. Make sure you and your agents know the authority that comes along with this document. My husband recently went to the Secretary of State with my power of attorney in hand. He is named as primary agent to handle my financial affairs. This means that he should be able to register a vehicle in my name without having me present or to sign anything at the Secretary of State. The state employee told him she wouldn’t recognize the power of attorney and that I had to be present. But, I had prepared him for this. He pointed out to her the specific paragraph that gave him authority to register vehicles in my name. Being as bold as he is, he even asked her to read the paragraph out loud and tell him why that wouldn’t work. In the end, he got the business done which is exactly what this document is meant for. Sometimes it just takes a bit of assertiveness.
4. Plan for a final update. I encourage all of my clients to be sure and get their power of attorney updated as they age and begin experiencing health issues. It might be the last time they ever get to update this document. It allows them to make sure the right people are named as agents and even designate co-agents if more than one person is actually helping with their affairs. Some large companies choose to ignore powers of attorney that are too old by its internal standards so it’s important to keep it current.
