John Bullis: Understanding financial power of attorney forms
September 18, 2012
There may come a time for all of us when we are no longer able (or don’t want to) handle our financial affairs.
The Durable Power of Attorney for Financial Matters is usually prepared by a lawyer to clearly show what is and is not covered. The form names an agent (other person, or firm) to have authority to pay bills, make deposits, do investments, arrange for insurance policies, etc.
The “durable” part just means it gives authority to the named agent when some illness, etc. prevents the owner of the assets from acting.
There is a variation called a “Springing” Power of Attorney. That usually means it does not transfer or grant authority until some event has happened. A common event is when, say, two doctors declare the maker (giver) to be no longer competent.
The main decision is whom to name as your agent, the one authorized to act in your place for financial matters.
You may have read or heard about elder financial abuse where the family member, caregiver or agent converts the property and spends the money for themselves. By knowing the agent you name is someone you can trust to make the right decisions and actions, you can relax and enjoy life.
Sometimes instead of just one person, co-agents are used. This could be two children or a child and a grandchild or a bank trust officer and a family member, for example.
Usually the other estate planning documents such as a trust will also be used in conjunction with the power of attorney. The Financial Power of Attorney form is handy for dealing with the banks, paying bills and getting day-to-day financial matters handled on your behalf. Normally the attorney or lawyer that prepares your trust and/or will will also prepare the power of attorney forms for you.
Sometimes the stockbroker or bank will want the form to be done on their own forms. That can be a bother, but is not the end of the world. Some clients just insist the form their attorney prepared will have to be used.
The Financial Power of Attorney form is powerful and should be carefully done in conjunction with your other estate planning. It’s good to talk with the person, persons or firm you plan to name. Find out if they are willing to serve before you go to the lawyer to get the form prepared.
The main goal is to avoid the court-ordered custodianship, guardianship, etc., with all those expenses. It is good to plan ahead and prepare for the future.
Did you hear? “Kindness makes a fellow feel good, whether it’s being done to him or by him.” By Frank A. Clark.
• John Bullis is a certified public accountant, personal financial specialist and certified senior adviser serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.