Appointing a Power of Attorney (POA) is an important decision, especially as you get older, as it’s a very powerful document. You can appoint someone a general and/or enduring POA to make decisions about your legal, financial and real estate matters if you are unable to.
If you no long have the mental or physical capacity to make decisions your attorney could sell your house, your shares and your car, withdraw all the money you have in the bank, and do whatever they wish (like take a once in a lifetime trip overseas).
Often someone will appoint their spouse and/or children as their POA, but this should not be the automatic choice. Whilst the attorney must act in your best interests and keep proper records, the opportunity for abuse is considerable and can not only leave you at risk, but also the inheritance you want to leave for your family.
Three things you can do to ensure your safety:
- Appoint people you trust (it does not always have to be a family member)
- Appoint 2 or more people to act jointly on every decision (or on big decisions)
- Stipulate limitations on what your POA can do (e.g. cannot sell real estate or withdraw/transfer over a certain amount without the co-attorney).
If you change your mind and potentially doubt the person you currently have appointed as your POA, or believe they may be influenced by others, it’s not too late to change your POA. Scott at Hume Taylor & Co can assist in not only a new POA, but also in Advance Care Directives and general Estate planning.
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