Appointing a power of attorney is key to protecting your money if you are no longer able to. Here, how to pick the best person for the job – and what you need to know to protect yourself if things go wrong.
The best thing you can do to protect your money is to appoint a power of attorney. This gives power and permission to someone you trust to manage your money and property on your behalf, often when you’re no longer able to.
Unfortunately, this decision can also backfire if the person you appointed decides to take your money and leave you penniless.
But according to Alan Goldhar at Ontario’s Office of the Public Guardian and Trustee (OPGT), there are some things you can do to protect yourself.
1. Appoint more than one person
If you’re not 100 per cent sure there is one person who is best to act as your power of attorney then appoint more than one person. For example, if you’ve appointed all of your children instead of one, they’ll all have to agree on decisions.
“It’s not about being mistrustful of one child over another,” says Goldhar. “It’s about having those who are trusted keep an eye on each other to act in their parent’s best interest.”
3. Clarify your needs
If you’re concerned about losing access to your money after a power of attorney is appointed, you can meet with a lawyer and detail how much financial control you want to give beforehand. For example, if you’re in Florida for the winter months, maybe you just want to grant financial control for designated months.
You can also do a separate letter of instruction, a document that outlines your accommodation wishes and directives. For example, do you want to live in your current living accommodations as long as your money will provide? What standard of nursing home do you consider an acceptable standard? A letter of instruction can guide your power of attorney’s decision-making.
4. DIY POAs
“Don’t be fearful that all family members or power of attorneys are out to get you,” says Goldhar. “But at the same time, if you’re at all concerned about financial abuse by family members, there are things you can do to protect yourself.”