A recent Wall Street Journal article highlighted some of the potential dangers involved when people create powers of attorney. These important legal documents are getting attention as baby boomers age and consider the possibility that they might one day need someone else to either manage their financial affairs or make medical decisions on their behalf. Unfortunately, there have also been a number of recent stories about elderly people who have suffered at the hands of agents who have wrongfully used their authorities under powers of attorney.
When creating a power of attorney, it’s important to keep in mind that these documents are there to serve your interests. You need to be very clear about your desires and take all steps appropriate to ensuring that your interests are adequately protected. An experienced and qualified estate planning attorney can guide you through the process of drafting the appropriate documents, but here are some issues you will want to think about.
Coordinating With Third Parties
Through a power of attorney, you grant another person the ability to represent your interests. The person you appoint, called your agent, will then represent your interests when he or she deals with various third parties, such as banks. Unfortunately, many third parties are adopting very stringent criteria when it comes to recognizing an agent’s authority under power of attorney. Even if you create a power of attorney document that complies with all relevant laws, there is no automatic guarantee that the third party will readily recognize that document. To help alleviate this potential problem you might want to check with any third parties you know your agent will interact with to see if there any additional requirements you will have to meet.
Creating the Power of Attorney Early
A lot of people wait until it is too late to create an estate plan or a power of attorney. You have to be of sound mind when you create your power of attorney, and waiting until you have suffered from a serious injury or are suffering from a mind-altering medical condition can be disastrous. It’s always best to create your power of attorney when you are in good health.
Modify the Power of Attorney
Reviewing your important legal documents every so often is an excellent precaution. With powers of attorney, you might want to take the additional step of periodically creating new documents. For example, updating your financial powers of attorney periodically would be prudent.
Ask For Advice
You won’t be able to anticipate every potential problem that could arise with your power of attorney. It’s always best to speak with an experienced and qualified estate planning lawyer anytime you have a concern or need specific advice about what your legal options are with these very important documents.