{"id":2682,"date":"2019-09-24T00:00:00","date_gmt":"2019-09-24T00:00:00","guid":{"rendered":"https:\/\/www.rbcwealthmanagement.com\/en-us\/insightswhy-a-power-of-attorney-should-be-part-of-your-retirement-plans\/"},"modified":"2023-11-01T11:04:50","modified_gmt":"2023-11-01T15:04:50","slug":"why-a-power-of-attorney-should-be-part-of-your-retirement-plans","status":"publish","type":"post","link":"https:\/\/www.rbcwealthmanagement.com\/en-us\/insights\/why-a-power-of-attorney-should-be-part-of-your-retirement-plans","title":{"rendered":"Why a power of attorney should be part of your retirement plans"},"content":{"rendered":"

While most people understand the value of a long-term income strategy and estate plan<\/a>, many fail to consider the importance of designating a power of attorney (POA) until a serious medical event occurs. And at that point, it may be too late.<\/p>\n

This is an issue that should be addressed well in advance of when you need it. With a POA designation in place, somebody will be in a legal position to act on your behalf if you’re suddenly incapacitated and unable to make decisions. You can become incapacitated and unable to handle your own financial affairs at any age—say, in the case of an accident or an unexpected health issue—but the risk increases as you grow older, says Tara Ambrose, senior manager of client risk prevention<\/a> at RBC Wealth Management–U.S.<\/p>\n

A durable financial POA can step in to handle your financial matters when you’re no longer able to, or when you no longer wish to retain control. This is distinct from a health care POA, which only allows you to delegate important medical decisions.<\/p>\n

“If you’re already retired or about to be, you should give serious thought to making a power of attorney designation,” Ambrose says.<\/p>\n

Identifying the right designate<\/h2>\n

You can name a family member, friend or even a professional (such as an attorney) to take on POA responsibilities. The goal is to identify someone who will be able to act as a trusted and reliable surrogate.<\/p>\n

“The trust factor is critical,” says Ambrose, “because you don’t want to be exposed to a situation where the person with the POA designation takes advantage of their position.”<\/p>\n

Married couples may consider their spouse to be the potential surrogate they would trust the most, but as both grow older, each person could lose the capacity to make decisions. In such cases, it may make sense to name someone else, such as a trusted family member, to carry the responsibility. It is important when establishing a POA designation to name successors who can step in if the primary designate is no longer able to fulfill the role.<\/p>\n

Roles and responsibilities<\/h2>\n

The two primary parties involved in the POA arrangement are:<\/p>\n