How to Choose the Right Person as Your Power of Attorney
Dec. 24, 2024
As an attorney at David W. Walker, Attorney at Law in Columbia, Missouri, I understand the importance of making informed decisions for estate planning.
One of the most critical decisions you’ll face is choosing the right person to serve as your power of attorney (POA). The individual you select will have significant control over your financial, legal, and healthcare decisions if you’re unable to manage these matters yourself.
Choosing a power of attorney is a crucial part of making sure that your interests are protected. The person you designate will need to make important decisions on your behalf, so it's essential that they’re trustworthy and capable. Read on to learn more about how to select the right person for this important responsibility.
What Is a Power of Attorney?
A POA gives someone legal authority to make decisions on your behalf if you become incapacitated or are otherwise unable to act. There are different types of power of attorney, such as durable, medical, and financial, each with specific powers and responsibilities.
Your POA will act in your best interest, whether managing finances, making healthcare decisions, or handling legal matters. Knowing these responsibilities can help you make an informed decision about who is best suited to serve as your agent.
What Makes a Person Suitable to be Your Power of Attorney
Selecting someone to serve as your POA involves looking for certain qualities that make sure they'll act in your best interest. A suitable agent must be reliable, responsible, and trustworthy. Since they'll be making decisions on your behalf, they must demonstrate the ability to handle complicated matters and act in a manner that reflects your wishes.
Some qualities to consider when choosing your power of attorney include:
Trustworthiness: This person should be someone you can rely on completely to act in your best interest, particularly during stressful situations.
Responsibility: Your POA will manage finances and potentially medical decisions, requiring someone who can handle these duties with diligence.
Good judgment: A strong POA should possess the ability to make informed and sound decisions, especially under pressure. As you evaluate your options, trust and communication with your agent are also key factors to consider.
Why Trust and Communication Should Be Your Primary Considerations
Trust is the cornerstone of any power of attorney relationship. The person you choose must be trustworthy and someone you feel confident will act in line with your wishes. It's important to have open conversations with the individual you’re considering to make sure they understand the scope of their duties and are prepared to take on the responsibility.
Before making a decision, discuss your expectations and wishes clearly to avoid potential misunderstandings. If there’s any hesitation on the part of the person you're considering, it might be a good idea to look for someone else who is more confident in taking on the role.
The Importance of Financial and Legal Competence
Your POA may need to manage complicated financial and legal matters on your behalf. That’s why choosing someone with a solid understanding of financial matters, such as budgeting, taxes, and investments, can make a significant difference.
Ideally, your agent should have experience handling important financial decisions or be willing to seek professional help when needed. Some financial and legal skills that are important for a POA include:
Financial literacy: Your POA should be comfortable managing finances, from paying bills to handling investments and assets.
Understanding legal requirements: A solid grasp of legal processes is helpful, especially when it comes to managing property or adhering to legal requirements.
Tax knowledge: It’s beneficial for your POA to understand basic tax implications, making sure that your estate is managed efficiently. Now that we’ve covered financial and legal considerations, let's examine the pros and cons of choosing a family member versus a professional.
Choosing Between a Family Member and a Professional
Many people choose a family member or close friend as their power of attorney, but that’s not always the best option for everyone. While a family member may be well-intentioned, there could be potential conflicts of interest or family dynamics that make it difficult for them to make unbiased decisions.
In some cases, it might be worth considering a professional, such as an attorney or financial advisor, to serve as your POA. This can provide added peace of mind that your affairs will be handled impartially and in a professional manner.
When to Choose a Professional Over a Family Member
Opting for a professional as your power of attorney can sometimes offer more advantages than selecting a family member. While professionals may charge fees for their services, they come with experienced knowledge and impartiality that a family member may not be able to provide.
Professionals can handle all the responsibilities of being a POA, from making medical decisions to managing finances, with no personal bias or family conflict involved. Some advantages of choosing a professional include:
Impartiality: Professionals can make decisions without being influenced by family dynamics or personal relationships.
Experience: An experienced attorney or financial advisor will be well-versed in managing complicated legal and financial matters.
Accountability: Professionals are accountable for their actions, making sure that they act within the scope of the authority granted to them. As you evaluate your options, it’s important to consider potential conflicts of interest.
Addressing Potential Conflicts of Interest
Even when choosing someone close to you, it’s important to consider potential conflicts of interest. If the individual you're considering has their own financial or personal interests at stake, they might not always make decisions that are in your best interest.
Be sure to think about your relationship dynamics and whether the person you’re considering can remain objective and put your needs first.
In some cases, designating more than one person as your POA can help balance potential conflicts. For example, you might choose a family member to handle your financial matters and a medical professional to manage healthcare decisions. This way, you can minimize the risk of conflict and make sure that all aspects of your estate are properly managed.
How to Prepare for Potential Family Disputes
Family dynamics can sometimes complicate the role of POA. If multiple family members are interested in serving as your POA, there may be disagreements or feelings of resentment. To avoid potential conflicts, be clear about your choice and communicate openly with your family members.
You may also want to consider including a provision in your estate planning documents that addresses how disputes should be resolved, whether through mediation or another method. This can help make sure that your wishes are respected without unnecessary conflict. Once you've made your choice, you can then formalize your POA.
Formalizing Your Power of Attorney
Once you’ve selected your power of attorney, it’s crucial to make the arrangement legally binding. An experienced estate planning lawyer can help you draft the necessary documents to formalize your decision. These documents will outline the specific powers granted to your agent and make sure that they’re legally authorized to act on your behalf.
Working with an attorney makes sure that your power of attorney is valid and recognized by all relevant parties, including healthcare providers, financial institutions, and government agencies. Let’s now examine the role of an estate planning attorney in the process of choosing and formalizing your power of attorney.
How an Estate Planning Attorney Can Help Choose Your Power of Attorney
An estate planning attorney can provide invaluable guidance throughout the process of choosing your power of attorney. With their knowledge, they can help you identify potential candidates, explain the different types of POAs, and assist with legal documentation.
Their assistance can help you avoid common pitfalls and make sure that your wishes are carried out accurately and effectively.
Estate planning attorneys are also instrumental in reviewing your choice of POA over time. As life circumstances change, your POA preferences may change as well. An attorney can help make sure that your documents are updated as needed. If you're ready to take the next step, my firm, David W. Walker, Attorney at Law, can help.
Contact an Estate Planning Attorney Today
With my experience in estate planning, I can guide you through every step of the process, helping you choose the right person to represent your interests and make sure that your wishes are respected.
My firm serves clients in Columbia, Jefferson City, Boonville, and Fulton, Missouri. If you're ready to make an informed decision about your power of attorney, reach out to my firm David W. Walker, Attorney at Law today.