While most of us would prefer not to think about it, a person’s cognitive abilities decline as they age. Once we reach an age where we can no longer manage our financial and medical affairs, we need someone we trust to step in and help make those decisions.
That is why choosing a power of attorney (POA) here in Virginia could be the most critical decision you can make as part of your estate plan. It’s a big decision regardless of your age or how much money you have.
Basic types of POA
An experienced estate planning attorney can help you select which legal documents are right for you, including:
- Limited power of attorney: Allows the agent to act for a specific matter or matters
- Durable power of attorney: Allows the agent to continue making decisions if you become mentally incompetent
- Health care power of attorney: Allows the agent to make medical decisions on your behalf
Steps to take in choosing a POA
A power of attorney is a routine document and can prevent estates from devolving into conflict and chaos. Here are essential steps in setting up a POA:
- Choose your agent carefully: Selecting an agent you trust is the most important step, but one that many make casually. The person selected is often a relative, but your goal should be to choose someone who will honestly and diligently handle your affairs when you can’t, even if the agent is not related.
- Consider appointing co-agents: Choosing two people to manage your affairs adds an extra layer of protection. However, it brings challenges such as making sure they can meet to discuss options and sign documents.
- Alert financial institutions: Keep your bank, broker and other financial institutions in the loop over your decision to help ensure a smooth transition.
- Make your intentions clear: Draft a letter to supplement your POA stating your plans about how your agent should act and about your wishes for what they will do and won’t do. Both you and your agent will sign the letter. While it may not be a legally-binding document, it will clearly state your wishes should the courts become involved.
Seek legal advice for setting up an estate plan
An experienced estate planning attorney here in Virginia can help you decide which legal documents are best for your situation and also help you with end-of-life plans such as living wills, trusts or advanced medical directives.