Appointing a financial power of attorney may be an important aspect of late life, even if you have a financial adviser or other professional money-management assistance. Choosing a financial power of attorney early in life provides peace of mind that you and your finances will be taken care of in the future, but it’s never too late to make a decision.
One reason to appoint a power of attorney is that dementia is a common ailment in later life. Dementia can reduce your ability to handle your own affairs, and you want someone you trust to do the job for you. Select a power of attorney that you know will make decisions that are in your best interest no matter what your ability is as you age.
Creating a power of attorney is not a difficult process, so there shouldn’t be procedural worries stopping you. Handling such decisions before a power of attorney becomes necessary may even save you time, money, hassle and heartache down the road.
Financial advisers and other professionals who currently help you with money management may not have the ability to become a power of attorney. Professional ethics and regulations draw a line for some professionals, and they will need a person with the legal authority to make decisions in order to continue managing your accounts if you are incapacitated.
Even if a finance professional sees signs in the future that you are unable to handle your accounts, they can’t contact anyone about the issue due to privacy laws. That means they could be stuck unable to do anything for you or following directives you make in a diminished state. Understanding the reasons for a power of attorney and acting now to create paperwork establishing someone as your power of attorney is the best way to protect your interests in an unknown future.
Source: LifeHealthPro, “Financial power of attorney: weighing the benefits” Tom Nawrocki, May. 13, 2014