![]() ![]() ![]() With a power of attorney in place, you can be confident that you’re prepared and your parent’s wishes will be respected when they need help. In this guide, we’ll explain the types of power of attorney, when a POA for an elderly parent makes sense, and go through the steps of choosing and setting up a power of attorney so that you feel prepared to complete this process for your loved one. It is better to be prepared than to have to scramble to think of what an elderly parent would really want.” Christina Jeter, Esq., of The Jeter Law Firm, PLLC, advises, “It always makes sense to have a power of attorney in place, regardless of any situation. It allows another person to take action on your parent’s behalf, ensuring bills get paid and medical decisions are made in the unfortunate circumstance that your elderly parent is unable to do those things on their own. If you are interested in learning more about powers of attorney, please visit our previous posts.A power of attorney (POA) is an important element of planning for your elderly parent’s future. It’s best to have a POA created that is uniquely drafted for your family and your situation. Downloading a POA and hoping for the best can undo a lifetime of financial and estate planning. You need to know what a power of attorney should include to make it work the way you want. The POA is a more powerful document than people think. This person is often the same person as the POA, with the idea that the same person you trust enough to be your POA would also be trusted to be your guardian. A POA may be used to name a guardian, who would be appointed by the court. Most folks have planned their trusts to work with their estate plan, and do not wish a POA agent to have the power to make changes. This would allow the POA to change beneficiaries and change the terms of the trust. Your estate planning attorney will be able to custom design your POA to protect your beneficiary designations.Ĭan the POA amend a trust? Depending upon your circumstances, you may or may not want your POA to have the ability to make changes to trusts. Do you want your POA agent to have the ability to change these? Most people do not, and the POA must specifically state this. Most people limit the size of gifts to the annual exclusion amount of $15,000.Ĭan the POA agent change beneficiary designations? Chances are a lot of your assets will pass to loved ones through a beneficiary designation: life insurance, investment, retirement accounts, etc. You can also give directions as to who gets gifts and how much. Will your agent be authorized to make gifts? Depending upon your estate, you may want your agent to be able to make gifts, which is useful if you want to reduce estate taxes or if you’ll need to apply for government benefits in the near future. If you chose to appoint two different people to share the responsibility and they don’t get along, time-sensitive decisions could become tangled and delayed.ĭetermine gifting parameters. The agent has complete control over your financial life outside of assets held in trust. ![]() Deciding who will be your agent is not always easy. Most estate planning attorneys will advise you to use the Durable Power of Attorney, as the Springing Power of Attorney requires extra steps (perhaps even a court) to determine your capacity.Īll authority under a Power of Attorney ceases to be effective when you die. The Springing Power of Attorney becomes valid only when you become incapacitated. The Durable Power of Attorney goes into effect the moment it is signed and continues to be valid if you become incapacitated. There are several different types of POAs. The trustee (you or a successor trustee, if you are incapacitated) appointed in your trust document would have control of the trust and its assets. Assets in a trust are not owned by you, so your agent can’t access them. The agent acting under the authority of your POA only controls assets in your name. A recent article from Forbes titled “4 Power of Attorney Clauses You Need To Focus On” explains it all. It is important to understand what a power of attorney should include. But you need to know how this powerful document is and what it’s limits are. The pandemic has taught us how swiftly our lives can change, and interest in having a power of attorney (POA) has increased as a result. ![]()
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