A power of attorney (POA) is a legal document that grants someone the authority to make decisions on your behalf.
Typically, people will designate one or more people as their POAs for their financial and medical affairs with the idea that these trusted people can step in and take over for them should they ever be temporarily or permanently incapacitated. Unfortunately, it’s easy to make mistakes that can put you in a less-than-ideal situation with your POA in the future. Consider these:
1. Naming more than one POA at a time.
Sometimes people will name two people, such as two adult children or a spouse and an adult child, as their co-POAs. This can create a lot of problems. At best, it may delay a lot of necessary actions because both POAs have to give their consent or signatures for everything. At worst, it can cause legal disputes if the co-POAs don’t agree on some action.
2. Naming a single POA with no alternative.
A POA is a type of contingency plan – but your contingency plan needs to consider other contingencies. There is always the possibility that your POA could be in a common accident with you, especially if you picked your spouse or another close relative, and be unable to serve when the time comes. Or, your POA could be ill, out of the area on vacation or just suddenly unable or unwilling to take on the role when they’re needed. You need an alternative designation.
3. Failing to notify prior POAs (and others) of changes.
Your preferences for your POAs may change over time, and that’s perfectly normal. However, make sure that you inform prior POAs that you’ve changed your designations – and update any institution, such as your bank, doctor’s office or hospital, of the change, as well. That way, there’s no confusion or mistake about who has the authority to act.
When you’re thinking ahead to the future, it’s smart to seek legal guidance about these issues and more.