When you are planning your estate, designating your power of attorney is one of the most important decisions you will make, so it’s prudent to give a great deal of though to whom you will choose.
Powers of attorney give another person, or more than one if you choose, to act in your stead. Essentially they have all the authority that you would normally have, although certain powers of attorney are limited in scope. For instance, a person with medical power of attorney for you can only make decisions affecting your health and medical treatment; your financial affairs are out of their realm of influence.
Similarly, if you entrust your power of attorney temporarily to your real estate agent to close on the sale of some property, he or she can’t expand upon that to include other transactions. Some powers of attorney are permanent and immediate, while others are only temporary while you recover from an illness or travel abroad. Still others are dependent upon future conditions that might affect your ability to act on your own behalf, such as cognitive impairment or physical decline from age or illness.
Spouses typically choose one another, but this can have drawbacks if your spouse is elderly or may become incapacitated right along with you. Sometimes it’s a good idea to choose an adult child who you know possesses integrity and will honor your wishes. While it’s a good idea for your power of attorney to have at least a passing familiarity with your business affairs, it is often better to choose a financial novice whom you trust implicitly than a wily wheeler-dealer. The novice can always learn financial acumen, while those lacking moral fiber aren’t likely to acquire it later.
Source: American Bar Association, “Power of Attorney,” accessed Aug. 12, 2016