Power of Attorney
“What is a POA?” This is a question I heard while at work recently. Prisoner of Azkaban? (Where are my Harry Potter fans at?!) Pledge of Allegiance? Plan of Attack? These could all be used for the abbreviation of POA but in the insurance world, POA generally stands for Power of Attorney.
So, what the heck is a Power of Attorney?
Translation: This means that someone can give another person power over their assets both legally and financially. The person that you name as your Power of Attorney can act on your behalf to handle business such as financial transactions like buying life insurance, making gifts of money, making health care decisions, etc. The Power of Attorney can either be set up for specific financial or healthcare matters or it can be set up to cover everything.
Because we care (awww), we want to add in a little note to advise the importance of choosing your POA. Please make sure that when you are thinking of who you want to be your Power of Attorney, you are giving this decision a lot of care and consideration. Take your time with this selection, as this needs to be someone that you completely trust as they could have access to both your physical and financial needs and you want to make sure that they will always act in your best interest.
Side note: A Power of Attorney cannot change a person’s will. A will is a separate document that can be set up to legally state who obtains what parts of your estate at the time of your death.
To name someone as your Power of Attorney, you must be of sound mind and mentally competent. This document must be signed and notarized by a notary. Fun fact: Attorneys are unnecessary to place a Power of Attorney in execution. (This is highly recommended though!) A Power of Attorney is typically put in to execution in advance of someone being incapacitated. The Power of Attorney can be revoked at any time (this means that even though you have something written down, if you are mentally competent and want to make changes, you can do so.)
So, why is it important for younger people (as well as older) to have a Power of Attorney?
- Healthcare decisions – Having a trusted Power of Attorney means that you can lay out what your wishes are when it comes to medical care. What you do and do not want if you were not able to make your own decisions. (You can even specify who can make the decisions on who bathes you, what you eat, etc.)
- Financial Matters – If it were needed, a financial POA would be able to file your taxes, collect your debts, pay your bills, access your bank accounts, manage any property that you own, help apply for government benefits like Medicaid/veterans’ benefits, and make future investment decisions.
- Religion or Culture – If your religion or cultural dictates portions of your life, this can be considered. Say that you need to make sure all your food is Kosher or you have specific brands of products that you might use, your Power of Attorney can make sure that this happens.
- Reproductive Material – Let’s say that you have either your eggs or sperm stored. Naming someone as your personal care Power of Attorney would give them the right to access these items if something were to happen to you.
- Pets – We all LOVE our pets, right?! (Shout out to my cats Jasmine and Sophia! Mama loves you!) Having a Power of Attorney in place ensures that your pets will be taken care of in the way that you wish.
There are many, many more reasons to consider obtaining and creating a Power of Attorney, these are just a few reasons!
In the future, we will be covering conservatorship, how and when these take place and why they are important. (Hint: Britney Spears and Stan Lee.)
Until then, face the fear!
**Disclaimer: I am not a financial professional. Please seek the advice of a financial professional when planning for your retirement and own financial situation. **
Written By: Nicole Ellsworth (@lacelemonslove)
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