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Powers of Attorney: What are the limitations?

On Behalf of | Sep 5, 2022 | Estate Planning

Things happen, and you could find yourself in a situation where you’re not able to direct your own affairs. In such instances, you may want to designate one or more representatives to act in an official capacity on your behalf. This is where powers of attorney (POA) can be useful.

A power of attorney allows you to nominate someone else to make decisions on your behalf should you be incapacitated. These can be healthcare decisions (as in a medical power of attorney) or financial (or general power of attorney). However, despite its benefits, a power of attorney does have its fair share of drawbacks. Here are some of them:

Financial POAs aren’t always recognized

Sometimes financial institutions have their own forms they insist upon using before they’ll let anybody else manage your accounts. While the financial power of attorney should be enough, that’s just not always the case.

A POA is only valid as long as you are alive

A power of attorney designation is only valid until your passing. As such, your POA agent cannot do anything to protect your assets when you pass on or facilitate the succession of your estate. For that, you need an executor.

Your POAs have a great deal of control 

You must choose carefully when you make your powers of attorney designations. You don’t want to trust your health to someone who won’t respect your wishes when you’re incapacitated nor your finances to someone who is disorganized or bad with money.

Find out how you can safeguard your rights and interests while creating powers of attorney and learn more about what it takes to have a comprehensive estate plan that will truly protect your future.