A power of attorney (POA) is a legal document that grants someone else (the agent or attorney-in-fact) the authority to act on your behalf in certain matters. Here are some dos and don’ts to keep in mind when writing a power of attorney
Do’s:
Choose a trustworthy agent:
When choosing your agent, it is important to select someone you trust to act in your best interests.
Specify the scope of authority:
Be clear about what powers you are granting to the agent. You may want to limit the scope of authority to certain types of transactions, such as financial or medical decisions.
Use clear and specific language:
Make sure the language in the POA is clear and unambiguous. Use specific terms to describe the powers being granted.
Consider including limitations:
You may want to include specific limitations on the agent’s authority, such as requiring the agent to obtain your consent before making certain decisions.
Follow legal requirements:
Make sure the POA meets the legal requirements in your jurisdiction. This may include having the document witnessed or notarized.
Don’ts:
Grant unlimited authority:
Avoid granting unlimited authority to your agent. This can put you at risk for abuse of power or fraud.
Use vague language:
Avoid using vague or ambiguous language in the POA. This can lead to confusion or misinterpretation of the agent’s authority.
Grant authority without understanding the consequences:
Make sure you understand the consequences of granting someone else the authority to act on your behalf. It is important to fully consider the potential risks and benefits before executing a POA.
Rely on a POA as your only estate planning tool:
A POA is just one component of a comprehensive estate plan. It is important to also have a will, trust, and other documents in place to ensure your wishes are carried out.
Wait too long to execute a POA:
It is important to execute a POA while you are still mentally and physically capable of doing so. Waiting too long can make it more difficult to execute a legally valid POA.