Part 2 of a series breaking down the process of helping clients set up Powers of Attorney for finances by breaking the issues down into smaller, individual topics, enabling the adviser and client to take the necessary steps and get the plan moving.
As is often the case, the greatest advantage of a Power of Attorney (where the Attorney-in-fact is given full authority to do whatever the Principal could do) can also pose its biggest risk. If the Attorney-in-fact is dishonest, the Principal’s money could be wasted away or even stolen. As noted in our last installment, Powers of Attorney are very powerful documents. With a general power, where the Attorney-in-fact can do whatever the Principal can do, it facilitates the continuation of one’s affairs. If the power is “durable,” it remains in effect if the Principal becomes incompetent. If the Principal is not competent, there may be no one to oversee the Attorney-in-fact, and the waste or theft may well go undetected until it is too late.
One key, of course, is to appoint only those people whose integrity is indisputable. Recognize that circumstances can change and one whose honesty was certain when the power was created could change. Safeguards may be beneficial, such as requiring periodic accountings to a court or third party or having more than one Attorney-in-fact named and requiring they act jointly.
In our next topic, we will discuss the difference between an “immediate” power, and a “springing” power.
You can view the first series of Wills and Probate Administration here and reach out to Dan with any questions.
Our attorneys are always ready, willing, and able to meet and discuss any questions, help you articulate your plan and goals, determine the best plan to accomplish them, and then implement it. You will find that, by taking those small steps, the problem that used to lead to procrastination and uncertainty has been addressed and resolved. Learn more about Mansour Gavin’s Estate Planning & Probate group or contact us today.