We're closing in on a sale of my manufacturing business and my attorney keeps telling me I need a POA in place in case something happens before closing. But here's my hangup: this person would potentially control a massive payout if I'm incapacitated. How do you even start picking someone you'd trust with that kind of money? My brother is a nice guy but can't manage his own checking account. My CPA is sharp but I barely know him outside of tax season. Feels like everyone is either too close to the situation or too disconnected. Any advice from folks who've actually done this?
Legal
How to name a power of attorney you actually trust with your payout
Following. I'm in the same boat with a smaller sale but the trust isse is huge. My lawyer said to pick someone who would follow instructions even if they didn't personally agree with them. Easier said than done.
You dont need one person to do everything. You can name co-agents who have to act together. Slower, yes, but it solves the 'one person goes rogue' nightmare.
Honestly I'd trust my CPA more than family for this. But you said you barely know him. What about your estate attorney? They're already in the weeds on the deal.
Co-agents is an interesting angle. Does that actually work in practice, or does it just creae gridlock when you need a decision fast?
Co-agents work but be careful. If one gets hit by a bus or just refuses to sign, you bette have a successor lined up. Otherwise you're back to square one with a deal on the line.
This is why you don't name a person at all. Name a trust company or a corporate fiduciary. They have procedures, insurance, and nobody's nephew is going to 'borrow' from your account.
Eh, corporate fiduciaries can be glacially slow and they charge for every phone call. For a single transaction closing, I'd rather have a real human who picks up the phone.
Bluejay has a point. Bank trust departments are great for long-term management, not for a time-sensitive closing where yku need someone to sign a wire transfer at 4:58pm on a Friday.
Wait, can the POA even do anything with the payout? I thought the money goes to your account and the POA is just for signing documents. Maybe I'm misunderstanding the whole thing.
Hank, depends how it's written. If the POA is broad enough it can access accounts, including where the proceeds land. That's exactly why you shouldn't use a generic form off the internet. The scope matters more than the name on it.
That's the part that keeps me up at night, QuantumSofa. The attorney handed me a boilerplate form and said 'just fill in a name.' Seemed too casual for Something this consequential.
If your attorney is handing you a boilerplate form for a multi-million dollar exit, maybe the POA isn't the only thing you should be reviewing. Just saying.
Sprocket beat me to it. A closing on a manufacturing business shouldn't involve a fill-in-the-blank POA. Get a second opinion on the whole package, not just the name.