Powers of Attorney – Your Golden Opportunity to Control Your Money
Last week, I appeared on television as an expert on powers of attorney. I’ll tell you about the show in a moment. First, I want to give you the three key benefits of having powers of attorney. Remember these benefits for yourself and your loved ones.
Powers of attorney allow you to be in control when you cannot make decisions for yourself. Most people understand what happens if they cannot handle financial decisions. Someone will have to take over control of your money. This could be a government agency, a court-appointed guardian or someone you do not trust.
If you have a valid power of attorney, you have a say in your financial future. A power of attorney is a legal document. It allows you to designate an attorney as your agent or substitute decision-maker. You can include restrictions or conditions in the document.
Lawyers can advise you how to protect yourself and your family. Before you meet your lawyer, you should know these three benefits:
1. Powers of attorney let you choose who is in charge of your money
You get to name your financial decision-maker. You specify if they need to work alone, jointly, with a friend, a professional, or with all your children. You have the right to name someone you consider trustworthy and honest.
2. Powers of attorney can ensure your family, friends or relatives cooperate
The POA can tell your attorneys to cooperate with your other relatives. For example, the document might require your attorney to share financial information. The attorney could consult your family to make decisions, such as:
• making charitable contributions,
• selling your home or your business,
• supporting a family member who is in need.
Remember, your attorney also needs to consult with you even if you are incapable.
You can require attorneys to co-operate with family members. They can share annual financial statements, tax returns or investment reports. This sharing can build trust and reduce suspicion. It also helps your family understand your financial circumstances.
3. Powers of attorney allow you to control costs
Making a valid power of attorney can avoid unnecessary legal disputes and expenses.
What happens if you cannot understand the consequences of your financial decisions? If you don’t have a power of attorney, you risk having a court declare you incapable. If that happens, someone must ask a court to be your court-appointed guardian.
Court-appointed guardianship is a complicated process. I have mentioned it in other blog posts. At a minimum, you undergo two capacity assessments. These assessments can cost hundreds to thousands of dollars.
If your relatives cannot agree among themselves, everyone will hire a lawyer at your expense. Anyone who has a financial interest in your affairs can participate. Having a court-appointed guardian normally costs thousands of dollars. By contrast, you can prepare a power of attorney at no cost.
Guardianship means a court supervises your finances. The court monitors the guardian. Normally, guardians must file reports with the court on an average of every two years.
The guardian’s reports are complicated and a costly procedure. Normally, lawyers are involved with a court appearance at additional cost.
What is the golden opportunity?
You can only make a power of attorney while you are still capable. Disease, disability and dementia often appear without warning. Once you need a power of attorney, it may be too late to get one.
Make sure you have a valid power of attorney today. You have a golden opportunity to control who is in charge of your money.
Oh, yes, the television program is called Heirs and Omissions. Adam Cappelli of Cambridge Law, is the host. Adam is a great lawyer who I have known for years. He is also a Certified Estate and Trust Specialist.Posted By: Ed Olkovich In: Powers of Attorney On: August 2nd, 2013