That is a valid question. One that is not pondered enough and often results in a family member being thrown into a position of great responsibility without any direction or idea how they are to act or what they are to do. In fact, most people sign power of attorney documents naming someone, but then never tell them or have a conversation with that person about what will be expected of them.
Instead, they leave the attorney’s office feeling relieved that they have a plan in place in the event something happens to them, and as soon as they get home, shove those documents into a filing cabinet, drawer or safe (not even telling anyone where they are located), knowing that when the time comes, they will let the named individual know. Except, the purpose of most powers of attorney is to authorize your named agent to act on your behalf when you are incompetent or unable to make decisions yourself. So, if your plan is to wait until you need the power of attorney before talking to your named agent, likely, it is too late.
The conversation needs to happen before naming anyone as your power of attorney so you can pick the right individual for the job (and it is a job, make no mistake). Generally, a financial power of attorney authorizes your agent to manage your finances, and specifically itemizes everything your agent is allowed to do on your behalf. However, a power of attorney does not list your assets or provide instructions regarding how those assets should be managed. Only you know that.
Thus, it is imperative that you let your agent know about every asset you own – real estate, personal property, bank accounts, mutual funds, stocks, bonds, life insurance policies, retirement accounts, trusts, etc. Where the assets are located, what company or institution holds them, how they are titled, and their values also should be disclosed to your agent. Your agent should also know your sources of income and when you receive your income so they can pay bills accordingly.
Additionally, you should tell your agent what your wishes are in the event you require long-term care. Do you want your assets used to keep you at home, or would you want them preserved for your beneficiaries? Either way, your agent will be in charge and if assets need to be liquidated, are there certain assets that he or she should liquidate first? These and many more decisions should be made and discussed with your power of attorney.
Being a financial power of attorney requires a lot of organization, work and time. It is a commitment that cannot be taken too lightly. You should choose a power of attorney that is trustworthy and has the time available to devote to managing your assets. And please, make sure your power of attorney knows what you have and what you want done with it. Call ERA Law Group, LLC today at (410) 919-1790!