A Durable Power of Attorney is an estate planning tool that can make it easier for a trusted family member or friend to manage your financial affairs and your health care decisions if you become incapacitated, either due to age, illness, or injury.
If you created a Durable Power of Attorney years ago and haven’t looked at since the ink dried, it’s probably time to review it. As with any estate planning documents, it’s important to evaluate your DPOA periodically to ensure it’s still meeting your needs. Things change over time, and there may be good reasons to update the document.
Many people rush through creating powers of attorney without thinking through all of the potential implications of their decisions. That decision can have disastrous consequences. A recent Forbes article highlighted some of the potential dangers that can come with powers of attorney created without a lot of thought. Those dangers include the following:
1. Appointing a family member based on relationship rather than their ability to do the job effectively.
2. Naming two family members to work together as co-agents. While this can work in certain situations, consider your agents’ ability to act if one of them was traveling or otherwise inaccessible.
3. Not verifying that your power of attorney meets your financial institutions’ needs and requirements.
4. Not requiring any oversight for your agent. This can be accomplished by requiring your agent to provide periodic accountings to another trusted person.
5. A failure to understand that most powers of attorney are effective immediately when signed.
Is your power of attorney up to date? We never know when incapacity might strike, so don’t put off reviewing and updating your power of attorney. Contact us today to discuss your options and to make sure all of your estate planning documents adequately reflect your wishes and goals. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.