Some people get nervous when they think about signing a Power of Attorney. Maybe they saw a movie where a guy was swindled out of a fortune when he signed one. Maybe giving someone control over your affairs is unsettling to you. Whatever the case may be, Powers of Attorney (POAs) can seem intimidating.
In our experience, most people don’t have a problem signing a POA and find them immensely helpful during difficult times.
POAs are simply tools you can use for your benefit. The circumstances surrounding them are rarely as dramatic as in the movies. In fact, they can be quite mundane. For instance, if you were to sell your house but were scheduled to be out of town on the day of the closing, you could give your real estate agent power of attorney. That way you don’t have to spend hours traveling just to sit in an office and sign on a couple dotted lines.
Around here, we commonly use POAs as tools to help people remain in control longer – a tool to help friends and loved ones make decisions on your behalf when you are no longer able to do so yourself.
Just like anything else, the more you understand about POAs, the less intimidating they’ll seem. To that end, here are four things you may not realize about Powers of Attorney:
1. POAs are voluntary. A person can revoke or change them at any time.
2. POAs should be prepared BEFORE you need them. If you suddenly get very ill, you may not have time to get a POA done before it’s too late. Once you are unable to communicate, it’s too late to sign a POA.
3. POAs cease upon death. The person you name as Power of Attorney will no longer be able to make decisions or act on your behalf after you pass away unless they are named executor or trustee. Either way, the role of POA ceases and other roles step in.
4. POAs must be kept current. Life insurance companies, banks, and investment companies are very particular about POAs.
Hopefully you’re a bit more comfortable with the idea of using POAs. It’s not just a tool for you — it’s a benefit for your loved ones as well. If you’re incapacitated and you haven’t named someone Power of Attorney, your spouse and/or children will have a difficult time making legal and financial decisions for you. They may have to go through an expensive, intrusive guardianship proceeding. So it’s a good idea to have POAs signed in preparation for these kinds of unexpected events.
Use POAs wisely, sign them when you’re fully mentally and physically capable, and give them to people you trust. They’re an excellent tool to protect you and make your loved ones’ lives easier during a difficult time.
If you have questions about POAs or would like to create one as part of an effective plan, give us a call at 217-726-9200.