Retirement & Financial Planning Report

A “durable power of attorney,” which gives someone else legal authority to handle your affairs in case you become incapacitated, cost money to be sure, but it can be well worth it. The costs are likely to be modest, anyway. They must be notarized but there’s no need to have them recorded anywhere. And you get to choose the person you want to handle your affairs in case of incapacity.

But there are some disadvantages that bear mentioning:

  • You need to have absolute trust in the person you name as your agent. Generally, your oldest child living nearby will be the best choice.

  • Some financial institutions won’t accept your power of attorney because they require the use of their own forms. You should send a copy of your power to each of your banks, brokers, mutual funds, etc., to see if there will be any problem.

  • Some companies won’t recognize old powers. You should put an expiration date on the document and update it every year or two, in keeping with your current wishes.