A power of attorney is an essential component of every comprehensive estate plan. This valuable tool can provide specific instructions for what should be done in the event you become incapacitated in the future and can no longer express your wishes. A power of attorney is a very versatile tool that can be tailored to your specific needs. It can also be crafted to bestow very limited powers or very broad authority. However, regardless of how effective this tool can be, power of attorney mistakes could create unnecessary problems for you or your loved ones in the future.
Creating a Power of Attorney to Quickly
Take your time to properly draft your power of attorney document. A common mistake people make is trying to create the document quickly in order to get the tedious task finished. However, this can often lead to loopholes, inconsistencies or ambiguous language that will create serious problems down the line. Take the time to discuss your goals for the future with your estate planning attorney.
Choosing the Wrong Attorney-in-Fact
Creating a power of attorney requires the appointment of someone as the agent or attorney-in-fact. This individual will have the authority to make very important decisions on your behalf. However, if you select the wrong person, your wishes may not be carried out as you planned and the financial and medical decisions made on your behalf may not actually be in your best interest. Take time to seriously consider your choice before you make it.
Granting Excessive Authority
A power of attorney can be created to give very limited or very broad authority. The choice is yours. However, because your agent will be able to make very important decisions on your behalf, understanding how much power to give your agent is critical. You need to consider whether you want your agent to make decisions regarding your medical care and whether those decisions should include your end-of-life choices. How much control do you want your agent to have over your finances? You can be as limiting and specific in your instructions as you choose.
Not Updating a Power of Attorney
Even if you have created the perfect power of attorney, if your circumstances or your wishes change, but your power of attorney does not, it could be rendered useless, at best. You must update your power of attorney to reflect any changes. Otherwise, you or your family may face challenges or issues in the future that could result in substantial emotional and/or financial problems. For example, if your family situation has changed, an inappropriate person may be given the authority to make medical decisions on your behalf, should you become incapacitated.
If you have questions regarding power of attorney, or any other estate planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.