“A power of attorney kicks-in, when someone has a physical or mental disability and is not competent enough to handle their own financial affairs or health needs.”
A Power of Attorney is just one part of your estate plan. Don’t have an estate plan? Instead of making the same old New Year’s resolutions, try making a will and an estate plan your top priority in 2019, says the Toronto Sun in the article “Where there’s a will, there’s a way.” We are reminded that when we do select a person to serve as our Power of Attorney (POA), we better make sure to appoint someone we trust.
Many people insist that they are fine and not old enough to need a POA. However, life holds surprises. Parents whose adult children are injured in a sport or accident, discover they can’t manage their kid’s finances because there was no POA in place.
Anyone over the age of 18 needs a POA and a will. The POA is used while you are alive, if you should become incapacitated and the will is used after you die. You’ll want to speak with an estate planning attorney to create both documents and an overall plan, since this is a complex area of the law and every person’s situation is different. There is no such thing as a one-size-fits-all document. The problem is, you won’t know that until it’s too late.
Another reason for an estate plan is to protect the emotional integrity of a family. Estate battles don’t just happen to celebrities. They happen to “regular” people as well. Families often fracture, when grandparents or parents neglect to share details of their financial situation or reasons for their estate plan.
Let’s say you come home from the hospital after a serious operation and find that a member of your family, without your knowing it, has decided to prepare all your belongings for your demise.
Everything in the house has a sticker on it, bearing either the name of a person who was expecting to inherit the item, or a price for an estate sale. No plans about your will were ever discussed with your children, so they had no idea what you wanted. From their perspective, they were expecting you to pass and just making sure things were properly taken care of.
Those kids probably won’t get a penny, since their eagerness was excessive. They were concerned more about possessions than their parents.
A better way to go is to work with an estate planning attorney to create a holistic plan that addresses your wishes, while you are living and the distribution of your assets when you have passed. You might want to consider holding a few family meetings with the attorney, so that everyone’s on the same page. You don’t want to come home from a hospital stay, to find your home ready for a yard sale!
Reference: Toronto Sun (Dec. 30, 2019) “Where there’s a will, there’s a way”