A Potential Problem with Power of Attorney Documents
One vital part of estate planning is the designation of Durable Power of Attorney. When you grant someone power of attorney, they are able to conduct certain legal and financial activities for you, in the event that you are incapacitated by illness or injury. A reliable and trustworthy person, granted power of attorney, can be an invaluable asset to your estate.
Many people make important estate planning decisions years before they ever need to put a plan into action. This is the best course of action, because none of us really know when we will need to access the resources we established in the estate planning process. One of those decisions involves back-up beneficiaries to assets; likewise, we often grant backup agents with power of attorney. This can be a smart decision, since something could happen to our primary attorney-in-fact before our Durable Power of Attorney documents are ever needed. They could be deceased, ill, out of the country, or otherwise unable to perform their duties when they are needed.
However, problems could arise if you name multiple attorneys-in-fact on the same document. Why? Let’s imagine that you name a close friend as your attorney-in-fact, with an adult child as their backup. Years later, you are ill in the hospital, and you need your attorney-in-fact to conduct certain financial transactions on your behalf. Your friend, the primary attorney-in-fact, is out of the country, so your son accepts the responsibility.
Upon a visit to your bank or financial advisor, your son is asked to prove that the primary attorney-in-fact is unable to act! This could take several weeks to sort out, and meanwhile your financial affairs are neglected. This is not what you imagined when you granted power of attorney to your friend and son all those years ago.
This is the exact reason that you should create separate documents granting each person power of attorney. Then, share your expectations with each person who has been asked to serve on your behalf.
You might wonder whether this creates the possibility of your attorneys-in-fact quarreling and working against one another. The bottom line is that if you fear such behavior out of any of your agents, then that person should not be trusted with any responsibility! Remember, the point of granting power of attorney is that this person – or in this case, people – should act in your best interests.
For more information on granting durable power of attorney, or on estate planning in general, call our office. Our estate planning attorney can work with you to establish a plan that protects your interests.