PLAN AHEAD: The way to shield your self when granting an influence of legal professional [Column] | enterprise
Whether or not you appoint someone as your proxy (technically speaking your “proxy”) is a personal decision, but one that, as a former lawyer, I generally recommend. However, sometimes seniors in particular can have difficulty deciding who to appoint, and understandably so. Children may have moved away or lost contact. Old contacts may have died or been disabled. You can’t trust everyone and there are also criminal cases for abuse of power of attorney.
Disability can come on suddenly and is one of the main reasons to hire an agent as long as you are healthy and can make smart decisions. On the one hand, I have seen cases where a person becomes disabled without having signed a power of attorney that can be obtained at a reasonable cost and with minimal fuss and the only alternative is for a prospect to apply for guardianship. Guardianship is time consuming and expensive, even if not challenged, it can limit individual freedom and result in the appointment of a person who the person does not want. However, guardianship may be the right answer in the right case.
On the other hand, those seniors are right who believe that powers of attorney are powerful documents and require thought.
As a senior, you can keep the “driver’s seat” when appointing an authorized representative.
• Choose your agent well. The best way to prevent financial exploitation by an authorized agent is to choose your agent well while you are in good physical and mental shape. In our office we use the rule “checkbook over the table”. This means that you feel confident to take your checkbook and give it over the table to the person you appoint, and she or she would act responsibly, act in your best interests, pay bills appropriately, and turn to experts, if expert advice is required, keep a record of your transactions and be diligent in handling your funds and assets.
You shouldn’t choose your agent based only on whether that person is your oldest child or if there are hurt feelings. If your agent is having money problems himself or herself, this may not be the time for an appointment as the stress may be too great.
• Have backups. At least one authorized substitute representative should almost always be appointed. If your primary agent is disabled or unavailable, someone needs to step in and act.
• Have the document adapted to your specifications. Powers of attorney are not the same as powers of attorney. You can give unlimited power, limited power, or no power, and either way, you should know why. You may or may not give up control of running your business or your business. Gifting can be allowed as long as your needs have been met and without your assets being used up. Limited gifting means $ 15,000 per person per year. That can be too much or not enough. You could give authority to redeem insurance policies for your needs but not allow the agent to switch beneficiaries.
If you want to hire two agents, you need to know if your bank, broker, or financial institution accepts two agents. They also need to consider whether they would work well together even if their appointment were feasible, or whether they should each have the power to act independently.
• Financial power of attorney and health care proxy can be separated. One child could be great for health care and another a number hog. Separate financial and health powers could give everyone the opportunity to be part of the decision-making process when they cannot.
• Fire if necessary. Realize that you can fire your agent by sending them a revocation or appointing someone else. If the situation has worsened, it may be best to consult a lawyer again.
After all, there are other ways you can protect yourself. You should be careful about who has access to your debit cards, credit cards, usernames and passwords, as well as online access to your bank and investment accounts. The same rules for trustworthiness apply. Get help when you need it.
Janet Colliton, Esq. is a specialist lawyer for senior law. Her practice, Colliton Elder Law Associates, PC, specializes in senior law, life care, special needs and estate planning, and estate administration and guardianship – with offices at 790 East Market St., Suite 250, West Chester, 610-436-6674, [email protected]. She is a member of the National Academy of Elder Law Attorneys and, along with Jeffrey Jones, CSA, co-founder of Life Transition Services, LLC, a service for families in long-term care needs. Listen to WCHE 1520, “A Plan Ahead,” Wednesdays at 4pm with Janet Colliton, Colliton Elder Law Associates, and Ron Ehman, Next Home Signature.