Let’s talk about something that’s not always fun to think about, but super important: what happens if you can’t make decisions for yourself? It might be because of an accident, illness, or just getting older. This is where planning for incapacity comes in, and a big part of that is understanding powers of attorney.
What is Incapacity?
Incapacity means you can’t make important decisions for yourself. This could be about your health, your money, or both. It can happen to anyone, at any age, which is why it’s smart to plan ahead.
What is a Power of Attorney (POA)?
A power of attorney is a legal document. It lets you choose someone you trust to make decisions for you if you can’t. This person is called your “agent” or “attorney-in-fact” (even though they don’t have to be a real lawyer).
Types of Powers of Attorney
There are different kinds of POAs for different situations:
- Financial Power of Attorney: This person can handle your money and property.
- Healthcare Power of Attorney: This person can make medical decisions for you.
- Durable Power of Attorney: This stays in effect even if you become incapacitated.
- Springing Power of Attorney: This only starts working when you become incapacitated.
- Limited Power of Attorney: This is for specific tasks or a set time period.
Why You Need a Power of Attorney
Having a POA is important because:
- It lets you choose who will make decisions for you.
- It can prevent family conflicts about who should be in charge.
- It helps avoid the need for a court to appoint a guardian, which can be expensive and time-consuming.
- It ensures your wishes are followed, even if you can’t speak for yourself.
How to Set Up a Power of Attorney
Setting up a POA involves a few steps:
- Decide what kind of POA you need: Financial, healthcare, or both?
- Choose your agent carefully: Pick someone you trust completely.
- Talk to your chosen agent: Make sure they’re willing to take on this responsibility.
- Get the right forms: You can get these from a lawyer or sometimes online.
- Fill out the forms: Be clear about what powers you’re giving.
- Sign the document: This usually needs to be done in front of a notary public.
- Give copies to the right people: Your agent, doctors, and maybe your bank should have copies.
Important Things to Remember
- You can change your mind: As long as you’re mentally capable, you can change or cancel your POA.
- Be specific: Clearly state what your agent can and can’t do.
- Keep it updated: Review your POA regularly to make sure it still fits your needs.
- Consider a backup: It’s smart to name an alternate agent in case your first choice can’t serve.
Common Mistakes to Avoid
- Waiting too long: Don’t put this off until you’re already having health issues.
- Choosing the wrong person: Pick someone who’s responsible and respects your wishes.
- Not telling anyone: Make sure your family knows about your POA and where to find the document.
- Making it too limited: If it’s too specific, your agent might not be able to help with unexpected issues.
Work With Me
Thinking about incapacity and setting up powers of attorney can feel overwhelming. But it doesn’t have to be. I’ve helped many families navigate this process, making it simpler and less stressful.
As your financial advisor, I can work with you to:
- Understand the different types of powers of attorney and which ones you need.
- Think through who would be the best person to act as your agent.
- Make sure your POA fits with your overall financial and estate plans.
- Keep your POA updated as your life changes.
- Coordinate with lawyers to get the legal documents just right.
Planning for incapacity is a gift you give to yourself and your loved ones. It brings a certain sense of peace, knowing that if something happens, your affairs will be handled the way you want.
I’m Robert Emmer, and I’m here to guide you through this important part of your financial planning. Let’s work together to set up a plan that protects you and your wishes, no matter what life brings. Reach out today, and we’ll take this important step together. Your future self (and your family) will thank you!
Disclosure: Raymond James and his advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Robert Emmer and not necessarily those of Raymond James.