Should I Name a Power of Attorney?

Sometimes people lose their ability to act in their own interests. Whether it's down to memory loss, physical debilities or old age, there are many people who get to the point where they are no longer capable of making rational choices in the crucial areas of life. Before this happens, many people will designate their own life choices to a third party who can act in their best interests. When you name an agent or entity in this role, they become your power of attorney.

Reasons to Designate an Agent

If you're starting to suffer memory loss, you might have difficulty in the future as you try to sort through bills, contracts and policies that you once found easily understandable. If you struggle more and more to get your paperwork done in the years ahead, there's a possibility that you might make some grievous error that could put you in jeopardy. Whether you sign away some exorbitant amount of cash or put some glaringly inaccurate number on your income taxes, your actions as an incapable person could endanger you both financially and legally. It wouldn't be fair to suffer such consequences, since the mistakes you'd be paying for would be down to your own incapacity. So to spare yourself from facing such dire circumstances, it might be wise to name a power of attorney before mental fatigue, memory loss or dementia sets in.

If your physical health is deteriorating, there's a chance that you'll be entering a period where you'll need constant medical care. As you take more medications and spend large amounts of time asleep, you'll probably be unable to handle things independently when it comes to all of your bills, prescriptions and spending time with grandchildren. Whether you need to be moved to a new residence or have certain policies converted on your behalf, there will probably be a number of functions that you won't be able to perform on your own. Even if your debilities merely keep you housebound, there might be agencies located far away that will want your signed name on certain contracts. To prevent yourself from missing out on things that you cannot even travel to, you should hire a power of attorney before any major physical debilities kick in.

Different Types of Power Agents

There are generally two designations for a power of attorney. The first designation is called the springing power of attorney, which only grants the agent limited power. As a springing agent, that person only has the power to act when you become incapacitated. In order for them to proceed in most instances, they'll need to show documented proof that you named them as your agent before they can act on your behalf. Typically, these documents will be in the form of doctor's letters or court orders which state that you're incapable.

The other type of agent is called the durable power of attorney. A durable agent can act on your behalf without any documents. If a major contract or policy expires after you've passed the point of mental competence, your durable agent could step in and renew your contract or convert your policy to the best of your interest.

There are many types of entities that you could name as your power of attorney. You could name a lawyer or institution, whom you'd have to pay by either an hourly fee or annual percentage. You could also name a friend or relative, which could actually be the best deal of all because you'd be getting free help from a person you know and trust.

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