According to the FINRA website: power of attorney is a legal document you sign to grant someone you trust with authority to make decisions on your behalf. You must sign when you're still mentally competent for your power of attorney to be valid. Planning for the future with a power of attorney could minimize complications to achieving your financial goals. Mental competency and minimizing complications are both excellent reasons to plan early for your later years so that your affairs are in order.
Selecting a power of attorney to manage your affairs—from managing your investments to overseeing your health care—is a decision not to be taken lightly. You need to name someone you trust to act just as you would, if you were able to do so. Additionally, you need to select someone who copes well in stressful situations and isn't intimidated by physicians and other medical personnel when it comes to your health care.
Since your power of attorney will potentially handle your legal and financial affairs, it makes sense to choose someone who has some experience in these fields or has the personality and financial savvy to handle the decisions that may fall to them.
Choose someone who:
- Is trustworthy and fair-minded
- Understands their duties and is committed to taking those duties seriously
- Understands your wishes and your values
- Demonstrates loyalty to you
The laws governing powers of attorney are specific to each state, so you must understand the applicable laws both where you live and where your assets lie. Most states require that your power of attorney be in writing, witnessed, and notarized.
When it comes to signing a power of attorney, there are different types depending on your needs. The kind of power of attorney you choose matters because it determines when such authority takes effect and when it's rescinded. For instance, non-durable powers of attorney are automatically revoked if you become physically or mentally incapacitated. So you may prefer to grant your agent what's called a durable power of attorney, which remains in effect even if you become incapacitated.
Setting up your estate plan can never start too early as it can become overwhelming at times. Call us, your trusted financial professional, at (704) 216-2260, and together let's get started on your plan today.
Adapted from FINRA & CzepigaLaw