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POA Asset Management
Mistake #1: I only trust one person to handle my money, so I am not naming another person
Failing to designate alternative agents in your financial power of attorney is indeed a common mistake. A financial power of attorney grants someone, known as an agent or attorney-in-fact, the authority to manage your financial affairs and make financial decisions on your behalf if you become incapacitated or unable to handle them yourself.
Here are some reasons why designating alternative agents is important:
1. Ensuring continuity: By designating alternate agents, you establish a backup plan in case your primary agent is unable or unwilling to act on your behalf when the need arises. This helps to ensure the smooth continuity of managing your financial matters.
2. Dealing with unforeseen circumstances: Life is unpredictable, and circumstances can change unexpectedly. Your primary agent may become incapacitated, pass away, or become unavailable due to other reasons. Having designated alternative agents ensures that someone is ready and able to step in if such circumstances occur.
3. Avoiding confusion and delays: Failure to designate alternative agents can lead to confusion and delays in the handling of your financial affairs. If your primary agent is unable to act and there are no designated alternatives, it may require court intervention to appoint a guardian or conservator. This process can be time-consuming, costly, and may not align with your preferences.
Mistake #2: I picked my son to be the POA of my assets even though he lives in another country
To avoid this mistake:
1. Choose trustworthy and reliable agents: Select agents who are not only capable of handling your financial matters but also willing to take on such responsibilities. Discuss your expectations and ensure they are comfortable fulfilling the role.
2. Designate multiple alternative agents: It is advisable to designate more than one alternate agent to account for various scenarios. You can specify the order in which they should step in if the primary agent is unable to act.
3. Clearly specify the conditions for activation: It is important to clearly outline the conditions under which the alternate agents should step in, such as the incapacity or unavailability of the primary agent. Be specific to avoid any ambiguity.
4. Review and update regularly: Regularly review and update your financial power of attorney as your circumstances or relationships change. Make sure all designated agents and alternate agents are aware of their roles and responsibilities.
Consulting with an attorney who specializes in estate planning and power of attorney laws can help ensure that your financial power of attorney is properly drafted and includes appropriate provisions for alternate agents. They can provide guidance based on your specific jurisdiction and individual needs.
Mistake #3: I don't need a POA over my assets
Failing to establish a power of attorney for asset management is indeed a common mistake. A power of attorney for asset management, also known as a financial power of attorney or durable power of attorney for finances, is a legal document that grants someone the authority to manage your financial affairs.
Here are some reasons why establishing a power of attorney for asset management is important:
1. Planning for incapacity: A power of attorney for asset management allows you to choose an individual, known as an agent or attorney-in-fact, to make financial decisions on your behalf if you become incapacitated or unable to handle your finances yourself. This ensures that your financial affairs are properly managed and your bills and expenses are taken care of.
2. Avoiding court intervention: Without a power of attorney for asset management, if you become incapacitated, a court may need to appoint a guardian or conservator to manage your financial affairs. This process can be time-consuming, expensive, and may not align with your preferences. By establishing a power of attorney, you can avoid the need for court involvement.
3. Ensuring continuity: Having a power of attorney for asset management in place ensures continuity in the management of your financial matters. Your agent can step in immediately and take care of financial transactions, pay bills, manage investments, and perform other necessary tasks on your behalf.
Mistake #4: I don;t want to give anybody authority to take over my assets while I am alive
Failing to establish specific triggering events or guidelines can create confusion and potentially lead to disputes among family members or other interested parties. It is crucial to clearly define the circumstances under which the agent's authority begins, such as when the principal becomes incapacitated or unable to manage their own affairs. Additionally, outlining any specific criteria or milestones that would warrant the agent's intervention can provide further clarity and prevent any ambiguity.
By clearly documenting these instructions, you can ensure that there is a smooth transition of authority when needed and that the agent understands their role and responsibilities. Consulting with an attorney experienced in estate planning can help you draft a power of attorney that includes explicit instructions regarding when the agent should assume control over financial asset management.
