Perhaps one of the most misunderstood elements of an estate plan is the power of attorney. You may have read news stories about people whose designated agent took advantage of them at a vulnerable time, and this makes you reluctant to include a POA in your estate plan. You may be one of the many in Hawaii who hesitates to include a POA in your plan because you have negative opinions based on bad information.
Understanding the benefits of a POA and dispelling the myths may allow you to protect yourself at a time when you will need someone to act on your behalf. This is what your POA can do for you. Without designating someone for that duty, you may be at the mercy of the courts if you cannot speak for yourself.
Afraid of losing control?
Despite what you may have heard from unreliable sources, a power of attorney agent does not have unlimited power over you and your estate. By law, your agent can act only in your best interests and only within the scope of the power your document provides. Just because you grant your agent the power to handle your finances does not mean the agent can swoop right in, sell your house and clean out your bank account.
On the contrary, your agent has a fiduciary obligation to protect your assets and manage them in a way that will benefit you. The best way to avoid a scenario where your agent will take advantage of his or her position is to choose your agent carefully. A POA agent must be above reproach, have a solid understanding of the duties of a POA, and accept advice and assistance from your legal counsel.
Other common misconceptions
While the fear of losing control of your estate and your well-being is often the overriding factor that causes people to hesitate in signing a POA, other misunderstandings may play a role in your delay, including the following:
- You want to wait until you are incapacitated so your children can petition for power of attorney for you. In fact, once you are mentally incapacitated, you cannot sign any legal documents.
- You plan to go online and download a generic POA document. However, online documents do not address your unique circumstances or the specific laws in Hawaii.
- Once you sign a POA, your agent gets all powers. The truth is that there are two types of POA with different levels of powers.
- Your POA agent can just take care of your estate after you pass away. In reality, a POA terminates upon your death.
If you still have questions or confusion about how a power of attorney can be a critical and beneficial addition to your estate plan, it would be wise to seek more information as soon as possible. Having a power of attorney in place can make a difference in your well-being if you should become unable to make important decisions on your own.