I'm going on a long vacation. Should I make a financial power of attorney?

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Question:

My wife and I are planning a trip around the world that will last about a year. We have read that we should make a power of attorney before we go, so that someone can take care of financial matters in our absence. What legal rights would we be giving away? How could this help or hurt us?

Answer:

The kind of document you're thinking of making is often called a "conventional" power of attorney -- as opposed to a durable power of attorney, which allows someone to manage the finances of an incapacitated person.

When you make a power of attorney, you give someone you choose -- called your agent or, in some states, your attorney-in-fact -- the legal authority to act on your behalf. But just what your agent is empowered to do is entirely up to you. In your power of attorney document, you can give your agent as much or as little power as you like.

You may want to grant narrow powers, such as the ability to sign checks to pay your bills or make deposits into your bank accounts while you're touring the world. Or you may want to grant broad powers that will permit your agent to handle any financial matters that arise while you are away, such as selling real estate and trading stocks.

When carrying out his or her duties, your agent is always legally required to act carefully and in your best interests. What's most important is to name someone you completely trust. Then you're free to set sail without worries.

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