A power of attorney (POA) document is a powerful tool that many Americans use in their estate plans. According to Caring.com, 18- to 34-year-olds with an estate plan increased by 50 percent in the past two years.
Unfortunately, many people who attempt to use a power of attorney in their estate plan make mistakes. These mistakes might compromise your estate and leave loved ones in difficult situations. See below for some common errors people make with their POA document, so you might avoid making them.
Drafting the wrong type of POA
A power of attorney is a catch-all term for many different types of documents. For example, you might want a general POA that gives someone power over your finances. Many people do not want to give such authority to their administrator, so a limited power of attorney might be more suitable. Like most aspects of estate planning, there is not a one-size-fits-all approach. You need to think carefully about the correct POA for your estate.
Creating an inflexible document
Some POAs are not flexible enough to deal with contingencies. If you suffer from an unexpected medical condition, your attorney must be able to handle your estate in a way that does not compromise your ability to receive government assistance. These decisions are tough to handle by yourself, so consult a professional who knows how to draft a POA that can deal with multiple situations.
Avoiding an estate plan might cost your family both financially and emotionally. Even if you draft a will, sometimes this is not enough. Take time to consider extra estate planning tools like a power of attorney to ensure you protect the interests of your loved ones.