Choosing the Right Agent for POA
You may not be aware of it, but once you are over the age of 65 there is a 7 in 10 chance that the day will come when you will need someone to help make decisions for you. Who will that be? Are you sure? Most people ignore or only casually think about whom they want to assist with their finances and health decisions when they are unable to help themselves. Many people give this little thought and elect their spouse or oldest child, assuming that these are the simplest of choices. But are we sure that these people are not only willing, but also have the knowledge and time to do the job well? Still others may choose a close neighbor. Why? They worry about family politics and don’t want to hurt someone’s feelings.
Choosing your spouse to assist in financial and medical decision-making seems logical. However, some of my elderly clients may choose a spouse even though they know that their spouse has no understanding of finances or may have memory loss issues of their own. Let me tell you a cautionary tale about this exact situation. An elderly couple named Joan and Ron recently faced some difficult decisions. Joan has chosen Ron to be her agent for financial and healthcare decisions, even though Ron was beginning to show signs of dementia. Ron was hospitalized following a fall when Joan suffered a heart attack and inadvertently ended up in a hospital herself. There was no one to advocate for either of them, nor to pay their bills. A family member had to go to court and request a court order so they could pay the bills and help with health decisions for both of them.
Others choose to nominate their eldest child because they believe that it will be politically acceptable to the family, and reduce family fights. Trust me, I have seen it all. Sometimes it is the oldest, other times the child deemed the closest, the smartest, the one with the most financial knowledge etc. People use all sorts of reasoning when making these decisions, but often fail to think about important factors. They also tend to assume that they must choose one agent, rather than assigning an agent for healthcare decisions and a different individual for financial decisions.
In another example, Richard nominated Paul, his oldest son, as his financial and health agent. He did so even though he knew that Paul had trouble holding down a job and periodically asked for money to pay his monthly bills. When Richard became hospitalized after an auto accident he was in intensive care for 2 weeks, followed immediately by almost 2 additional months in rehabilitative care before finally returning home. In the meantime, Paul ignored Richard’s bills while telling his siblings that all was well. He used Richard’s checking account as his own to buy a motorcycle and to take a two week vacation. Paul’s lack of skills to help with his father’s finances resulted in Richard paying a lot more for services than he should have, not to mention the monies that were lost to his spendthrift son’s whims.
Is there a better way to select a financial and health agent to help when you need it most? The answer is a most definite YES! Take time to evaluate a number of important factors. For example, think about the skill level, honesty, and proven responsibility of the agents you select. Don’t forget to make sure that they will also be available and have time to help you if you need it. For example, if the person you select is always traveling, they may not be around when you need them. Even though they have the best of intentions, they will not have the time to attend to helping you in a timely way. Have a frank conversation with your potential agents and make sure that you both understand the potential needs.
Professional agents are another alternative to family and friends. Some people select a banker, an accountant, attorney or other professional as their agent on their financial and health powers of attorney. Sometimes there is a fee arrangement for these services but no fees are paid to the nominated professional until the day they are needed. Advantages of using a professional include: The professional knows what needs to be done, he/she is not a family member, and they are accountable. The chances that you may eventually need help are high. Don’t leave your fate to chance. Take the time now to really consider your options and then make an educated, well thought out choice!