What many people do not realize is that perfectly healthy people can use a power of attorney document to give others the legal authority to take care of their financial matters, so they can do other things.
Many people think of a power of attorney document as something you set up in case something life-changing happens, such as, you are in a catastrophic car accident and cannot manage your own finances for a while. What many people do not realize, is that perfectly healthy people can use a power of attorney document to give others the legal authority to take care of their financial matters, so they can do other things.
Let’s say you found your dream house, but the sellers insist on a closing date right in the middle of your vacation. Before you cancel your cruise, have your lawyer write a limited power of attorney and designate someone to attend the real estate closing and sign the documents on your behalf. Just make sure you trust the person, and that you bring them back a souvenir.
You can also get a financial power of attorney for more than one transaction. For example, you signed on to serve for two years as a 50+ volunteer with the Peace Corps. You can name someone to collect your income, pay your bills, open your mail and manage your investments, while you are overseas. You can authorize the person to enter into contracts, rent out your house while you are away, handle insurance issues and move money around in your bank accounts, in case you are in a remote location with no reliable internet for online banking.
Durable Power of Attorney
The most common reason for people to set up a durable financial power of attorney is in case they are incapable of managing their money matters one day, due to an illness like Alzheimer’s disease, or a debilitating injury. The person named to take actions (the agent) on behalf of the incapacitated person (the principal) seldom reads the fine print in the document. The designated agent (usually a close relative) takes a copy to the bank and the nursing home to show that they have the authority to pay the person’s bills.
What the agent might not know is that (depending on the wording in the power of attorney instrument) she can also collect debts on behalf of the principal, and apply for public benefits for him, like veterans benefits and Medicaid. She can file his taxes, manage his property, buy or sell stocks and bonds and run his business, according to his instructions.
If the document authorizes it, he can buy and sell real property, personal property, digital property and intellectual property, and make gifts to individuals and charitable organizations. He can even designate someone to serve as the agent in her place.
To make sure that your power of attorney instrument is set up to control as many things as you want, be sure to talk with an estate planning attorney in your area.
Aging Care. “Things You Can and Can’t Do with Power of Attorney.” (accessed August 15, 2018) https://www.agingcare.com/articles/things-you-can-and-cant-do-with-poa-152673.htm
American Bar Association. “Pick the Right Power of Attorney Instrument.” (accessed August 15, 2018) https://www.americanbar.org/publications/voice_of_experience/2017/march-2017/pick-the-right-power-of-attorney-instrument.html