NEW YORK (AP) At age 42, Mark Lemont is looking forward to a long, healthy life with his wife and daughter. But, should he become seriously ill or disabled, he's prepared he and his wife have determined who would handle their financial and health care decisions in case they are no longer able to do so.
It's just not something that pleasant to deal with,'' said Lemont, a musician in Toledo, Ohio. But I think if you have kids, it's just part of that parental responsibility. You've just got to do it.''
Financial planners agree and, as the oldest baby boomers head into their late 50s, say that boomers of all ages must think about how they want their affairs handled in the event of illness or disability if they are unable to make decisions for themselves.
Although many of the 76 million boomers, those Americans born between 1946 and 1964, know the importance of having a will, planners say fewer realize it is equally important to set up a system for dealing with incapacitating illness or other emergencies. In most cases, that means giving another person what is called power of attorney, or durable power of attorney, over your affairs.
Power of attorney is a flexible, easy, convenient document in which you, the principal, select a person you want, called the agent, to take care of your business affairs should you become incapacitated or disabled,'' said Sally Hume, a lawyer with AARP's consumer protection division.
Power of attorney can also be granted for health care issues.
But many people are reluctant to deal with power of attorney issues. A 2000 AARP study found that among Americans age 50 and older, 60 percent had wills, but only 45 percent had given someone power of attorney.
In part, that gap is because of education. Many people don't realize or anticipate the need for power of attorney. The whole concept can also be intimidating: There is a lot of confusion about what the term means, and when such powers kick in.
It can be like giving someone a blank check,'' said Chris Cooper, a certified financial planner in Toledo, Ohio, who worked with the Lemont family on their documents. People can get a will done. They're OK with death. But power of attorney means admitting you're alive but unable to handle your affairs. That's hard for many people.''
Power of attorney documents can be structured in different ways. In some cases, the agent, the person granted the power of attorney, can assume it at any time. In other cases, a power of attorney cannot be assumed unless certain criteria, such as specific signs of disability or incompetence, are met.
Regardless of how you structure your power of attorney, experts recommend giving it to someone who shares your values and that you trust in any circumstance. It can be a family member, relative or friend. If you have second thoughts about your choice, find someone else. It's possible to give more than one person power of attorney, although that may complicate decision-making.
It's also important to note that spouses do not have power of attorney over each other automatically. Legal documents are still needed, Hume said. She also advises having a backup power of attorney, in case the person you appoint cannot serve.
Still, Cooper is adamant that anyone who has property or money needs to grant someone power of attorney, noting that no one ever knows when they're going to be struck by debilitating illness or be in a serious car accident, for example. Even if you were only in a coma for a few weeks, someone would need to be able to pay bills and make other informed decisions concerning your affairs.
Those aren't the only reasons for power of attorney, however. Take a couple in which the husband is sent to fight in Iraq, leaving the wife responsible for financial matters, including the closing on the sale of their home. Depending on how the ownership of the home is structured, the wife may need to have power of attorney over her husband's finances to close the deal without him there.
Once you've decided who to give power of attorney to, the next step is discussing it, and making sure that he or she is comfortable with the responsibility.
Don't skimp on the quality of the legal documents you draw up to cement the relationship, either. Although software packages and do-it-yourself legal workbooks may suffice in some cases, Hume generally recommends going to a lawyer for advice.
Because there is such a potential for misunderstanding by both the principal and agent as to what power of attorney means it's always wise to talk to a lawyer,'' she said. There are lots of things about powers of attorney that people really need to understand not only in granting them, but in receiving them.''
© 2016. All Rights Reserved. | Contact Us