Most people envision a power of attorney as something you designate on your deathbed. Actually, this is the worst time to attempt this decision. When my husband and I completed our wills, the lawyer also had a file the paperwork for the power of attorney.
My first thought was why? As my husband, can’t he already access all our bills and accounts anyway? Not completely… any joint assets like a house can’t be sold without the consent of both parties. Imagine a scenario where you were in an accident, unable to respond, and the bills were stacking up. Your spouse needs to sell the house or car to keep up… but if your name is on the title… then without the power of attorney it can be extremely difficult to take this route.
A power of attorney authorizes someone to make financial or medical decisions on your behalf while you are alive. Once you die, your will takes affect and the control provided through the power of attorney ends. You can change it anytime and even make it temporary… but it is important to have a person designated when you are healthy and able. This will ensure your assets and rights are protected at a time of disaster.
Identify a person to be your financial power of attorney. Discuss this decision with him or her, ensuring he or she is comfortable with the idea. In many cases, this person will be your spouse – but not everyone is married. Filling out the paperwork and getting it signed and notarized is the next step. Then you should alert your major financial institutions of your power of attorney document and names involved. Some institutions have their own special forms to fill out.
A medical power of attorney is a living will. He or she can be the same or different person than your financial power of attorney. This process is as critical as the financial power of attorney, but for completely different reasons not related to finances.
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