A General Durable Power of Attorney is one of four basic estate planning documents I recommend for every client, along with a Last Will and Testament, a Living Will, and a Health Care Power of Attorney. They often ask, “Why do I need a Power of Attorney (POA)? I have all my faculties and am perfectly capable of taking care of my own affairs.” The answer is: that’s exactly the best time to execute one.
Through a General Power of Attorney, you authorize one or more individuals to step into your shoes and take action on your behalf, in your place, as your agent, or “attorney-in-fact.” What can an attorney-in-fact do for you? Just about anything that you can do for yourself. And while you may have no need for that kind of help, that can change in a tragic heartbeat. Now, while you are capable of making an important decision with a clear head, and have the time to do so, is when you should take care of this life planning tool.
You should name at least one person to serve as your agent, and one alternate, to serve in case your first choice is unable to serve. Who should it be? If you are married, it makes good sense to name your spouse. For an alternate, you might name one of your adult children. It could also be a close friend who knows you and your affairs well. The most important characteristic about an attorney-in-fact is that you must have complete trust in them to use this authorization wisely and honorably in their best interest. Someone who is good with money, is organized and keeps good records, lives near by or can be near by quickly, and with whom you have a very strong relationship, is the best kind of individual to name.