The Importance of Power of Attorney

An important part of retirement and estate planning is making sure that you appoint one or more trusted and responsible individuals to serve as your Power of Attorney in the even that you become unable to handle your financial affairs or medical decisions.

Many people postpone setting up the appropriate Power of Attorney documentation, thinking that there will always be time to make such decisions later on. Even though no one likes to think that accidents or illnesses may strike, it's a fact that once something happens that renders and individual incompetent to make legal decisions, it's too late to take care of the matter. At the time you name someone as your Power of Attorney, you must be mentally competent.

The documentation will specify the circumstances under which the Power of Attorney would go into effect. You can choose to appoint someone to serve as your General Power of Attorney, meaning that the individual would be able to act on your behalf for a specific period of time, or in a certain transaction. Many people who go on extended overseas vacations name someone to serve as their general Power of Attorney in their absence.

Special powers of attorney are different, and become effective only when one or more physicians determines that an individual is no longer mentally or medically capable of handling his or her affairs. Such a decision can be made based on severe dementia, medication which impacts one's reasoning ability, or being in a permanent vegetative state as a result of an accident or injury.
No one wants to think that he or she will ever be in a position where a family member or other loved one has to handle their affairs. However, in the event of a catastrophic illness or accident, having legal documentation regarding Power of Attorney in effect can reduce the stress and burden on your loved ones, and ensure that the person you want to make decisions on your behalf is exactly the individual entrusted with that responsibility.

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