It’s hard to think about the possibility of no longer being able to make financial decisions. Nobody wants to imagine they will become incapacitated.
However, whether it’s because of old age, health or a combination of both, there is no way of guaranteeing you will always be capable of making your own decisions. This is why it so important to designate a trusted individual power of attorney (POA).
What is a POA?
A POA allows you to appoint an individual to act on your behalf should you no longer be able to. This person can make important financial decisions, including managing your bank account, taxes and real estate.
Who to select
The most important factor in choosing a POA is trust. Many people choose a family member, such as a sibling or adult child. Some people also choose a close friend.
It is important to keep in mind the power this person will have over your life, so you want to choose someone you trust implicitly.
Types of POA
There are several different types of POAs. You’ll want to review your options with a lawyer who can help you choose what is best for you depending on your needs.
Again, we can’t stress enough how important trust is when selecting a POA. As you are going through the process, you should take stock of your finances and assets and determine who will best represent your interests and wishes.
It’s also important to know it is never too soon to start thinking about a POA. Even if you are young and healthy, being prepared can help you avoid issues. If you are older, health issues can come on suddenly and you’ll want to have a plan in place.