Seniors sometimes hesitate to sign a power of attorney that allows someone to act on their behalf because they fear losing control and worry about being exploited. It’s not unreasonable, but it does create problems, says Daily Local News in the article “How to stay in control when appointing a power of attorney.”
On one hand, without a properly-executed durable power of attorney, which is relatively simple to obtain from an estate planning attorney, the family may be faced with going to court to file for guardianship. Guardianship is expensive, time consuming, can limit the individual’s freedom and may even result in an appointment of someone the person does not want to be their guardian. There are some instances where guardianship is necessary, but avoiding the expense and complications of the process are one of the chief benefits of a durable power of attorney.
On the other hand, seniors who believe that a power of attorney is a powerful document that requires careful consideration are right to give it the thoughtfulness this document deserves. Striking the right balance between fear of the power the document creates and respect for its importance is essential when helping seniors understand the need for it.
Here’s how to maintain some measure of control, while having a power of attorney:
Be certain about the agent you name. This is not a role for someone you recently met who feels like an old friend. It must be someone you would easily trust with your entire life savings, without a second thought. You need to be 100% sure that the person would act responsibly, in your best interests, following through in paying bills, consulting with experts when necessary, keeping records and being scrupulously honest and putting your interest first in everything they do.
Don’t name someone just because they are your oldest child and someone’s feelings would be hurt. If a person has money problems themselves, that person is not a good candidate for this role. Some of the tips in this article about choosing a trustee may be helpful if finding a qualified agent is a problem.
Have a backup. Or two. If your primary agent is unable or unwilling to act on your behalf, have a second person, or even a third, ready to act. You can get comfortable with your power of attorney without fear of losing control if you are confident that someone will definitely be able to help.
Ask your estate planning attorney to create documents that work for you. There are forms you can use, but they may not be appropriate for your situation. Your best bet is to have an attorney prepare a power of attorney document that meets your specific needs. For instance, you may not want to give someone unlimited power, or you may want to give them power to do everything but gift assets. You might want to give them the ability to cash in insurance policies for your medical expenses, but not to change the beneficiaries on your insurance policies.
Separate financial power of attorney and health care power of attorney. One person does not need to handle all your tasks. One of your children may be great in crisis situations, while another is good at finances. Divide up the tasks, so that each can participate in decision making, in different areas. This is particularly useful when the differing requirements of the jobs may suit your children differently. The characteristics that make up a good and effective agent for a durable power of attorney are different than those that make one a good health care proxy.
Fire at will. You retain the right to fire your agent(s), by serving them with a revocation or by appointing another attorney in fact. If the family is not getting along and things have turned ugly, speak with your estate planning attorney to ensure that the proper protections are in place.
Lastly, protect yourself by keeping access to debit cards, credit cards, usernames, passwords and online access to bank and investments carefully secure. If you run into a problem, don’t hide from it—get the help you need, either from a family member, trusted friend, or your estate planning attorney. I strongly recommended that all of my clients use a secure password manager, which will make your online life easier and more secure now, and greatly simplifies the process of letting someone take over if you die or become incapacitated.
In the end, one needs to balance the value of a power of attorney and the fear of losing control in a way that addresses your concerns.
Reference: Daily Local News (June 11, 2019) “How to stay in control when appointing a power of attorney”