Power of attorney allows you to appoint someone you trust to manage your financial and medical affairs during your lifetime if you become incapacitated. However, there are some common mistakes that people often make when dealing with POAs.
Understanding the most frequent mistakes will help you avoid them and ensure that your power of attorney is enforceable and effective to accomplish your goals.
Mistake 1: choosing the wrong agent
The agent receiving your power of attorney will have significant control over your finances and healthcare decisions. Choose someone you trust implicitly. Avoid appointing someone solely based on their relationship to you. Instead, consider their ability to handle the responsibilities, their willingness to act in your best interest and their overall trustworthiness.
Mistake 2: not communicating your wishes clearly
Another common mistake is failing to communicate your wishes clearly to your chosen agent. Your agent should understand your preferences regarding financial management and medical treatment. Discuss your wishes in detail and consider putting them in writing to avoid any confusion or misinterpretation.
Mistake 3: not keeping your power of attorney up to date
Life circumstances can change over time and your POA should reflect these changes. Failing to update your POA regularly can lead to complications, especially if your chosen agent can no longer fulfill their duties or if your wishes have changed. Review your POA periodically, especially after significant life events such as marriage, divorce or the birth of children.
A well-crafted power of attorney is an important component of a comprehensive estate plan. Take the time to carefully consider your options and make informed decisions when creating or updating your power of attorney.
