What Is A Power Of Attorney?
What Is A Power Of Attorney?
By Cameron Huddleston
If there’s one thing I think no adult should be without, it’s a power of attorney.
You were probably thinking I was going to say something more essential to a happy life – such as love and affection or a sense of purpose. Of course those things are important, but I’m a financial journalist and this is a blog about money (mostly). So that’s why I want to highlight how essential having a power of attorney is for everyone.
Unfortunately, most Americans don’t have this legal document. Only one-third of adults 55 and older have a durable power of attorney, according to a survey by Merrill Lynch and Age Wave. The percentage among younger generations is likely even lower.
If so many Americans don’t have a power of attorney, it can’t be that necessary, right? Wrong. If you want to have a say in who gets to make financial decisions for you if you can’t on your own, you need a power of attorney.
The ABCs of POA
A power of attorney is a legal document that allows you to name someone to make financial and legal decisions for you if you can’t. You might need someone to make financial decisions for you if an injury or other health emergency leaves you temporarily unable to make decisions on your own.
You might need someone to manage your finances for you if you develop dementia. Or you might simply need someone to make a one-time financial transaction for you if you’re overseas and can’t access your accounts.
In short, there are a variety of situations when you might have to rely on someone else to handle your finances for you. You want that to be someone you trust and have chosen to take on the responsibility.
Otherwise, if something happens to you, the person who steps into this role – or is appointed by a court — might not be the person you would want handling your finances (more on this below).
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