With great power comes great responsibility...
Power of attorney, or POA for the cool kids, can be granted to a person who is given the legal right to handle your legal and financial matters if you’re unable to do them yourself. This includes paying bills, managing bank accounts, overseeing investments, and preparing and filing tax returns on your behalf.
How long does it last?
When you die, the POA dies with you. Well, not the person you named. The legal power the person has over your estate is no longer in effect after you die.
This important-sounding title has three variations
Durable power of attorney: This type goes into effect the moment the paperwork is signed and kicks in if you’re deemed mentally incompetent. However, as long as you’re deemed competent you can change it at any time.
Springing power of attorney: This is like the durable POA, but it kicks in--or “springs” into action--if you become seriously ill or injured.
Limited power of attorney: This is used when you need someone to take care of a specific financial or legal goal. The limited power of attorney expires if the limited purpose of the power has been completed, when you die, or potentially when you become incapacitated, unless the power is durable. Like if you’re out of the country and need someone to stand in for you on the closing of a house. Yeah, it’s not an everyday occurrence, but at least you now know what it is.
What makes a POA A-OK?
• Attention to detail.
• An understanding of the duties required, and a commitment to taking those duties seriously.
• An understanding of finances and, ideally, business.
• The ability to collaborate with attorneys, accountants, and other parties, if necessary.
Do it online or in person
There’s a bunch of online legal services that can help or you can work with a lawyer.
Online route: Factors to take into consideration when choosing an online legal service include cost (usually between $15 and $50), completion and delivery time, and the services offered by the site. For example, some online legal services will submit your documents for review by a paralegal after completion, and others don’t.
Lawyer route: You’ll need a trust and estate attorney with significant experience. Talk to friends, family members, and other attorneys to get recommendations. Meet with the lawyer you’re considering before hiring him or her.
One thing to note: You’ll most likely have to get the final documents notarized, which you can get at a bank, post office, or local government office.
This article is provided by Everplans — a life and legacy planning company dedicated to transforming the way people get their families organized. For more information, visit:everplans.com
Neither Transamerica nor its agents or representatives may provide tax, investment, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.
Things to Consider:
- While this sounds complicated, you can get it done relatively cheaply either online or with an attorney.
- Pick someone who’s good with money, paying bills on time, and collaborating with financial and legal professionals.
- Don’t pick someone who’ll run off to Vegas with your savings the moment you get a head cold.
- Make sure to sign and notarize your POA (if required) to make it official.