A power of attorney is a legal document in which you grant to someone else the authority to oversee your financial affairs and make prudent decisions on your behalf if and when you are unable to do so on your own. Those decisions could be as mundane as paying household bills during a temporary period in which you are recovering from surgery or as extensive as managing the entirety of your estate, including the sale of your house and transition to an assisted living facility, should you become mentally or physically incapacitated. However, without careful planning, a power of attorney could prove powerless when it is needed most. Here are three important tips to consider.
Plan Ahead with Professional Guidance
The best way to prepare for an uncertain future is to plan ahead under the guidance of qualified legal and financial professionals. How would you manage your finances and pay your bills if your memory were to be impaired? Who would you trust to follow your wishes and make those decisions for you? Are you willing to give up complete control of your estate to a stranger?
It is critical that individuals consider all of the potential physical, mental and financial challenges they may face as they get older and the level of control they are willing to give up along the way. Similarly, you should ensure you take the time, while you are well and able, to confer with your selected agent, explain your ultimate goals and wishes, and confirm that he or she is willing and able to take on these responsibilities. For example, you may grant a family member complete control over your bank account in order to pay your bills but limit their authority to make decisions regarding your investment portfolio.
Make the Power of Attorney Durable
When a power of attorney is durable, you receive the reassurance that it will remain in effect regardless of whether or not you become mentally incapacitated. Without this designation, it is possible that your power of attorney could be challenged and a court of law may be forced to name an agent on your behalf.
Understand and Abide by the Requirements of your State and your Financial Accounts
It may not be enough for you to hire an attorney and go through the process of signing and notarizing one document granting a friend or family member the authority to act on your behalf. Rather, each financial institution that holds your assets, be it a bank, a credit union and/or a brokerage firm, may require that you designate your agent by completing their separate power of attorney forms.
Additional Protections for Florida Residents
If you live in Florida, you have at your disposal an additional planning tool to help you protect your interests in the event that you become incapacitated or unable to care for yourself in the future. A Pre-Need Guardianship allows you to name another individual to serve as your personal representative and have the authority to oversee all of your personal affairs in the event that you are no longer able to care for yourself, your children or your property due to advancing age, illness or a catastrophic accident. Rather than handing this authority over to the courts, a pre-need guardianship gives you the power to select who you think would best represent your interests and be willing and able to step into your shoes and make the right decisions on your behalf.
About the Author: Brendan T. Hayes is a financial planner with Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs and a registered representative with PWA Securities, LLC. He can be reached at the firm’s Fort Lauderdale, Fla., office at (954) 712-8888 or email@example.com.
Provenance Wealth Advisors (PWA), 200 E. Las Olas Blvd., 19th Floor, Ft. Lauderdale, FL 33301 (954) 712-8888.
Brendan T. Hayes is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult with your financial advisor about your individual situation.
Updated on December 15, 2023