One of the most difficult aspects of creating an estate plan is unquestionably the need to allocate responsibilities to people in your family. Choosing who gets what asset may be a simple process by comparison. There may be certain items that have a meaningful history for family members or loved ones, or assets that people have specifically requested to inherit.
Fewer people are likely to directly request responsibility in your estate plan. Whether you need someone to serve as executor or power of attorney, the amount of responsibility and work that goes with that honor often keeps people from seeking it out.
However, just because your family members aren’t fighting over the role of power of attorney doesn’t mean you should avoid naming one. Instead, you should make a selection based on your trust of certain family members and your faith in their ability to follow through with your instructions.
Power of attorney should only go to someone trustworthy
In many comprehensive estate plans or living wills, the testator will name someone for both financial power of attorney and medical power of attorney. It is usually in your best interests to name different individuals for each rule. This prevents any one person from winding up overwhelmed by the responsibilities.
Anyone with power of attorney will have the right to make medical decisions on your behalf or complete specific financial obligations for you. You should only name someone in your power of attorney if you implicitly trust their ability to follow your instructions. Those with a history of addiction or gambling problems, for example, may not be ideal candidates.
Choosing someone smart enough to follow your instructions and honest enough to handle the responsibility that comes with the role requires careful consideration of the people in your life.
Create a very specific, limited power of attorney
Regardless of how much trust you have for the individuals named in your will, you should still take steps to protect your financial circumstances and legacy. You can protect your medical wishes by creating an advance medical directive that will guide the person you name as your medical power of attorney in making decisions on your behalf.
For financial power of attorney, the greatest protection will likely come from carefully wording your documents to limit the power and access to financial accounts allocated through the power of attorney document. For example, you may limit which accounts someone can access or what reasons they can disburse funds from a bank account.
While these steps may seem unnecessary, it can protect your wishes and your assets. Choosing the right person to make decisions and take action on your behalf if you become incapacitated is not an easy process. You may find that discussing your wishes and needs with an attorney is a good frrst step toward protecting yourself in the future.
Kevin Tharpe
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