The power of attorney is most welcomed by many people because of its function to appoint a person to make decisions on your behalf. In case you get sick or you go out of the country and there would be important errands or transactions to be done, you could be sure someone would appropriately takeover to make sure everything is in place. If you are considering getting a power of attorney, you should make sure you are appointing the right agent or attorney-in-fact (the person who would be given authority to make or execute decisions for you).
One usual issue about power of attorney and appointment of agents is the way the person manages or handles finances. In the power of attorney, especially for the ‘durable’ one, that same agent is given the full authority to manage and handle all your money and assets in case you get mentally incapacitated. That is why many people choose to appoint their spouses or relatives as agents. But there are still issues and conflicts arising in such situations.
How could you make sure your agent would be using the authority well? First, you should appoint a person who you have already proven to be trustworthy and reliable. He/She should be highly ethical so as not to defraud you or steal money from you. Second, that person should have the ability to prudently and effectively manage finances. If not, he/she should be humble and wise enough to seek assistance from experts and professionals to make sure your finances are well managed and handled.
To be able to handle and manage your finances better, your agent must always decide to keep his/her own money separate from yours. Thus, there would be no confusion. The agent must not be personally involved in any transaction where he or she is representing your interests. For example, he/she must not be a stock investor who would gain more from buying your shares in a company in an inappropriate manner or pricing. The agent should be firm in keeping accurate all records pertaining to all transactions he/she gets into on your behalf.
You could have the option not to include specifications or instructions that would give your agent the permission to transfer to himself/herself any of your property or bank account. The law usually allows the agent to transfer your assets to your spouse (if your agent is not your spouse). However, the law does not allow him/her to transfer any of your properties to any other individuals, even your children.
Always seek the assistance and guidance of your private attorney when making or drafting the content and provisions of your power of attorney. It is more recommended that you do so especially if the document would involve your properties, savings, and income. You could still safeguard your assets even if you get into a power of attorney. That is if you could be more wise and prudent in making decisions.
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What are the ways to put your finances in order when time comes you are unable to do so? Setting up a power of attorney (POA) is one of your options when it comes to managing your daily financial affairs and transactions under certain circumstances such as when you are undergoing medical treatment or out of the country. It refers to a legal document that allows an individual or a financial institution such as a bank to manage your finances whether you are capable or not of doing it on your own.
The following are the essential considerations that you need to think about when creating a financial power-of-attorney document:
1. The need for a POA
Do you think you need help with handling your financial affairs? There are certain situations in which powers of attorney are not needed. For instance, if you own a big estate, you may be better off preparing a revocable living trust that offers great tax benefits and fits your needs. You may want to consider having both a financial POA and a revocable living trust.
2. The person who will act as your attorney-in-fact or agent
Take time in choosing the right agent who you will trust to carry out your financial tasks with your best interest in mind. Here are some of the characteristics that you should consider when selecting your financial agent:
• Financial savvy
• Trustworthy and comfortable to work with
• Can devote enough time to perform the required financial responsibilities
• Accessible and lives near your residence so that you can easily discuss with him or her any pertinent concern about your POA
• Can commit to carry out his or her duties as an agent if you are unable to handle your finances for a long time
Once you have chosen an agent, don’t forget to discuss the tasks, including the financial duties involved.
3. The forms you will use for preparing the power-of-attorney document
Use the power-of-attorney forms available online as your model or starting point. Before you consult with a lawyer, it is best to view several POA forms and understand fully the terms specified on them. That way, you can see the various possibilities before you head over to a lawyer’s office.
There are many sources of POA forms online these days. You can download a form from the Internal Revenue Service (IRS). You may opt to look for a particular POA form for your state on some websites that specialize in legal documents.
If you are about to finalize your POA document, you have to consult a lawyer first. You can ask the lawyer about the form of authority that suits your needs best as a principal.
4. The parties that will receive the power-of-attorney documents
Your power of attorney must be put in writing, signed by all parties involved (including the witnesses), and duly notarized. If the terms in the POA are related to taxes, it must be filed at the state government. If the terms are related to your real estate, your POA document must be filed at the office of the local county recorder.
Power of Attorney Related Articles
- An Insight On The Different Types Of Power Of Attorney
- Choosing an Agent for your Power of Attorney
- Choosing The Best Agent For Your Power Of Attorney
- Essential Information about Durable Power of Attorney
- Frequently Asked Questions about Power of Attorney
- How an Agent in Your Power of Attorney should Manage Your Money
- How Much Power of Attorney Should You Give to Your Attorney-in-Fact?
- Important Considerations When Creating a Financial Power of Attorney
- Medical Issues And Power Of Attorney
- Power of Attorney 101
- Power Of Attorney And Its Validity
- Power of Attorney: A Brief Overview
- Power of Attorney: Should You Get One?
- Power of Attorney: What to Consider in Choosing an Attorney-in-Fact
- Preparing for Your Future? Consider a Health Care or Medical Power of Attorney
- Seven Steps in Preparing a Power of Attorney
- The Pros And Cons Of The Power Of Attorney
- Types Of Power Of Attorney
- Understanding The Power Of Attorney
- Watching It: Power Of Attorney And Problems}
- What Is The Durable Power Of Attorney For?
- What Power of Attorney Is
- Why Do You Need to Prepare a Power of Attorney?