Creating an estate plan involves more than deciding on the distribution of your assets and naming beneficiaries. It’s also about planning for the unexpected, such as becoming incapacitated and unable to make your wishes known.
Naming a power of attorney (POA) allows someone else to make decisions on your behalf when you can’t. However, having a backup plan for your estate plan is just as important.
Strength in numbers
Life is unpredictable, which is why you named an individual as your POA. But what if that person is unavailable or unable to fulfill their duties due to their own health issues, relocation or death? Having multiple powers of attorney in place ensures that someone is always ready and able to step in without needing court intervention. This continuity is crucial in emergencies where decisions need to be made swiftly.
Another reason is the diversification of duties among agents. You may trust one person to handle your financial affairs but feel that another family member or friend is better suited to make healthcare decisions on your behalf. By appointing a financial POA and a separate healthcare POA, you can ensure that each area is handled by the person best suited for that position.
Managing complex financial affairs or making difficult healthcare decisions can lead to burnout. You can reduce the pressure on any single individual by distributing responsibilities among multiple agents.
Having more than one POA can also act as a system of checks and balances, ensuring that no single person has absolute control over all aspects of your affairs. This can be particularly important in preventing financial abuse or mismanagement and adding an extra layer of security.
Naming a POA is a step in the right direction, but having one or two other individuals as backups or diversifying duties adds an additional layer of protection. When setting up POAs, it is crucial to discuss your strategy with someone who can ensure that your documents are properly drafted and accurately reflect your wishes.
