It is hard for most people to imagine a time where they won’t be able to make their own financial decisions, but, for many, there’s a chance that it will come. Dementia, accidents, illnesses and other circumstances can leave a person ill-equipped to handle their own finances. However, a power of attorney in Singapore can provide a viable option. This document empowers someone of the planner’s choosing to handle their financial matters if they are unable to do so, and it is one of the most important documents to have, regardless of a person’s age. While this topic may not be the most pleasant one to discuss, the following information can be helpful.
Do Not Allow a Forced Signing
Despite the importance of a power of attorney, some people may abuse their privileges, and it’s important for planners to be careful. One should not feel coerced into signing a document, and they should contact a lawyer or other professional to get another opinion.
Choose the Agent Carefully
The person chosen will have complete authority over the principal’s finances; therefore, it is important to choose someone who is trustworthy. The agent should understand the principal’s goals, and if they are in control of investments, they should have the knowledge to make decisions and communicate with advisors and brokers.
There are Multiple Types of Power of Attorney
Several kinds of financial powers of attorney exist, and it is important to think of the differences before making a selection.
Durable powers of attorney go into effect when they are signed. Unless it is canceled by the principal, it remains effective through that person’s lifetime, regardless of incapacity.
Springing powers of attorney only start when certain events occur, such as when the principal becomes incapacitated or achieves a certain age. These may require a medical evaluation and a determination that a person can no longer manage his or her affairs.
It is worthwhile to note that all powers of attorney have one thing in common: they expire when the principal passes away. While the document can offer clarity as to the management of someone’s affairs while they are alive, it does not supplant the need for an estate plan that goes into effect when the person dies.