Power of Attorney: Reducing Potential Risk

A properly prepared and implemented power of attorney should consider and reduce potential risks to the individual and their family. Of course, appointing the “right” person as an agent is key. Characteristics such as trustworthiness, honesty, aptitude, experience and loyalty are important to consider. However, the manner in which a power of attorney document is prepared can also significantly reduce potential risks. For example, it may be wise to exclude certain more “sensitive” powers from a power of attorney (such as the ability to revise estate planning or beneficiary designations). Additional precautionary steps can be taken by naming co-agents or requiring notice to a second individual. A non-immediate “springing” power of attorney also affords some risk reduction.