Powers of attorney are among the most useful estate planning documents. They take effect when people experience incapacitation. Financial powers of attorney grant an agent or attorney-in-fact authority to access resources, manage a small business and pay an individual’s bills. Medical powers of attorney allow a specific person to make health care decisions for someone who has become incapacitated.
People who have powers of attorney on record have protection in the event of an emergency. If they end up in a coma because of a sudden reaction to a medication or a work incident, there are trustworthy people to manage their affairs.
Especially for those who do not have spouses, powers of attorney are critical during emergencies. The protection derived from the document depends in no small part on the actions of the agent or attorney-in-fact the principal selects.
How do people choose the right agents when drafting their documents?
Reliability and availability are key concerns
An agent or attorney-in-fact generally needs to be nearby and readily accessible. Someone who lives across the country or who routinely travels abroad for extended periods may not be available when an emergency arises.
Thinking about people’s career obligations and families can help narrow the list of potential candidates. People may also want to consider how members of their inner circle handle stressful situations. People who hold power of attorney generally need to be able to assert themselves when there is conflict. They must be ready to explain the preferences of the incapacitated principal and to carry out their wishes even when other people disagree with them.
They also need to be trustworthy enough to manage an individual’s finances without taking advantage of the access that they have to accounts and other resources. Ideally, people drafting powers of attorney can create a list of three to five potential candidates. They can then discuss the decision with each of those candidates. It is usually possible to name a primary agent and an alternate in the event that the first option is not available for some reason.
Selecting the upright agent is just as important as drafting the document and including appropriate restrictions on authority. People who have support while drafting comprehensive estate plans can better ensure that they establish documents that adequately protect them even in the most difficult situations.