Picking the right person -- or persons -- to manage your affairs when you can't is a retirement planning decision to be made cautiously.
Anthony Enea, a New York-based attorney who specializes in retirement-related issues and estate planning, says he's stopped counting the number of people who choose poorly, picking someone who is nice to them -- like their mail carrier or their nurse's aide -- but who isn't the right person to grant power of attorney or health care proxy or to act as their executor when they die.
"I understand," he says. "They have a relationship with the mailman, but they don't see their son. He's too far away. We don't have nuclear families anymore."
But bad choices like this can lead to a variety of problems, including elder abuse. Being given access to a helpless person's money can be an enormous temptation for the unscrupulous.
This also opens the door to family feuding when family members doubt the capability of the decision-maker. "I have seen firsthand the bitterness, resentment and destruction of relationships," Enea says. "The effect is best described as a 'family divorce,' the impact of which can be felt for generations."
Enea suggests that you pick two people in whom you have confidence to manage your affairs when you can't -- a spouse, children, grandchildren, longtime family friends. Set it up so that both have to sign off on key financial decisions, although you might want to give only one health care decision-making powers if just one can be located in an emergency. Otherwise, choosing two and asking them both to sign off is a built-in system of checks and balances, he says.
And they don't have to live close by. "In this day of mobile communications and computers, it is no harder to locate someone who lives across the country than it is find them if they live down the street," Enea says.