As we age, the importance of having legal documents in place grows. At MMCCU, we understand that making decisions about your future can be daunting. One of the most impactful choices you can make is setting up a Power of Attorney (POA). A POA allows you to designate a trusted person to manage your finances, health, or other personal affairs should you become unable to do so yourself.
The Importance of a POA as We Age
Planning for the future becomes critical as we grow older. Unfortunately, age can bring about unforeseen challenges, and one way to protect yourself from these disruptions is through proactive planning. Setting up a POA before any health issues arise ensures that someone you trust will be able to step in seamlessly, minimizing disruptions to your financial and personal well-being.
Why Now? Ensuring You’re of Sound Mind
To establish a POA, you must be deemed “of sound mind,” meaning you can understand and sign legal documents. This is essential because, without a POA in place, loved ones may face a lengthy and complex process to gain authority over financial decisions should you lose the capacity to do so. Waiting until health concerns arise could mean missing the window of opportunity to complete the necessary paperwork, which can lead to financial strain and emotional stress on your family.
Key Times to Consider a POA
- Retirement: As you transition into retirement, setting up a POA allows you to ensure your finances will be managed according to your wishes if your health or cognitive abilities change.
- Diagnoses of Health Conditions: If diagnosed with a condition that may impact cognitive or physical abilities over time, setting up a POA early will grant peace of mind.
- Major Life Events: Events like moving, the birth of grandchildren, or the sale of a property are also good times to establish or review a POA.
- Any Time After 50: Age alone isn’t a reason to worry, but as a safeguard, consider establishing a POA as part of a larger estate plan around midlife or retirement age.
Choosing the Right POA
Since a POA grants significant responsibility, it’s important to choose a trusted individual who understands your values and will act in your best interests. You may opt for both a financial POA (managing bank accounts, property, and financial assets) and a healthcare POA (making medical decisions), based on your needs.