Drawing up a will can give you peace of mind but naming a power of attorney may be even more essential, says Cornwall wills and estates lawyer Michele Alinotte.
While it shouldn’t be a choice of one over the other, having a will but not a power of attorney could create chaos if you become incapacitated for some reason, says Allinotte, principal of Journey Law (formerly Allinotte Law Office).
“I think it’s more important to have a power of attorney because, if you are incapable of making decisions, you will need funds for your care,” she tells AdvocateDaily.com.
While there are remedies to have guardianship established if a person without a power of attorney becomes incapacitated, it can be a complicated and lengthy process.
“That’s going to take months, and in the meantime, no one is able to do anything with your finances. No one has access to your bank or business accounts, and no one has the ability to pay your bills or sell your property if you need money to pay for your care,” Allinotte says. “All of these matters are held in abeyance. Everything comes to a standstill.”
She says it can be especially worrisome if you have children to support, but your finances can’t be touched until a court decides who has guardianship.
Allinotte says appointing a power of attorney is not a complicated matter, and you don’t have to possess financial expertise to do the job, although “You should be organized.
“I think it’s important at the outset to make sure that you know what you need to do your job well,” she says. “I don’t necessarily know if you will need legal advice on an ongoing basis unless there are things that come up, but it’s important to get legal and accounting advice at the outset to make sure things are set up properly and that you maintain proper records.
“Many people don’t inform themselves about their obligations if appointed as a power of attorney. You should get a copy of the document, know what it says and what it means.”
Allinotte advises the power of attorney should make a list of the person’s financial holdings and update it when circumstances change.
“For example, tomorrow you start acting for your great aunt who has all of these assets, and then she dies in 10 years and has named a number of beneficiaries,” she says. “But most of those assets have been depleted, and someone’s going to ask what happened, and if you can’t tell them, that’s where you can run into problems whether you’ve acted appropriately or not.”
Allinotte suggests making sure the person you name as a power of attorney is aware of it, adding she will sit down with the client and the person they have chosen to answer any questions.
“I offer to talk with the family members who might be acting because if you don’t know that you’ve been named until someone is incapable, then you have no real opportunity to ask a lot of questions,” she says.
Allinotte says it’s a good idea to ask about how you should proceed if there is an incapacity, and details about banking and legal representation, who does their taxes and where do they keep important paperwork, such as a will or insurance policies.
“You can start to get yourself organized even if you’re not formally acting as the attorney, and once there is a decline in their health or faculties you have already done some of the legwork,” she says. “It’s certainly much easier to manage things because you know where things are. If you are stepping in cold, then it can become really difficult.”
*this article originally appeared on AdvocateDaily.com by Tony Poland