A DURABLE FINANCIAL POWER OF ATTORNEY:  ONE ESTATE PLAN DOCUMENT YOU MUST HAVE

05
Jul2021
Financial Power of Attorney

A DURABLE FINANCIAL POWER OF ATTORNEY:  ONE ESTATE PLAN DOCUMENT YOU MUST HAVE

  • By Legacy Law Center
  • 178

A DURABLE FINANCIAL POWER OF ATTORNEY:  ONE ESTATE PLAN DOCUMENT YOU MUST HAVE

              A durable financial power of attorney should be part of every estate plan.  Here are six (6) reasons why a durable financial power of attorney must be included in any estate plan.

#1          Because without a Durable Financial Power of Attorney, a Guardian and Conservator will have to named on your behalf.

If you are no longer competent, an power of attorney lawyer near me will be unable to draft a power of attorney for you, no matter how badly you may need it.

Why?  Because an attorney must first determine you have capacity to create the power of attorney before it can be drafted.

If you are not competent, under Missouri law, someone would have to become your guardian (having all decision making authority for every aspect of your life.  This would include healthcare decisions.  A conservator is in charge of your finances and must assist in keeping your bills paid, banking, filing tax returns and so on.

The real problem with seeking guardianship is that under Missouri law, anyone can seek to become guardian.  This can be problematic where you have multiple members of your family who want to be in charge.

You avoid all of this by creating a power of attorney document while you are competent.

#2          Naming an attorney-in-fact or agent in your power of attorney Missouri document allows the person you choose to handle all of your financial affairs.

Imagine what problems would arise if you were no longer competent and had not named someone to act on your behalf in a financial power of attorney document.

Think of the disasters waiting to happen:  you can’t file a tax return (or hire someone to do so), you fall behind on paying utilities / a mortgage / life insurance premiums.

That would be a disaster.  However, with a power of attorney St. Charles drafting your document, your chosen agent can handle all of these things for you.  You don’t lose a step.

#3          Creating a durable financial power of attorney allows you to retain control over who is making decisions for you if you are unable to do so. 

Let’s face it, most people trust some family members over others.  Plus, you can always change the document if your chosen POA passes away or you are no longer in contact.

Estate planning goals are varied.  However, gaining peace of mind should be a central goal of every estate plan, no matter what the circumstances may be.

By creating a durable financial power of attorney, you no longer retain control but you can have a list of your preferred choices to serve as your attorney-in-fact.

Naming as many alternates as possible should also give you peace of mind, in case the first choice predeceases you, is incompetent themselves or is not in a position to protect your interests effectively.

#4          With a power of attorney in place, you can allow your attorney-in-fact to assist you in qualifying for federal benefits for military service or if you need to go into a nursing home but don’t have enough money to pay for your stay.

Medicaid and VA Aid & Attendance are two benefits that can help you as your get older.  As opposed to Medicare, Medicaid and VA Aid & Attendance are a means tested benefit.   Therefore, your funds and assets must be limited in order to qualify.

However, a Medicaid lawyer O’Fallon can, under the right circumstances, help you qualify more easily for these benefits by setting up an irrevocable trust, or, in some cases, by gifting money.

Where a power of attorney factors into Medicaid is that in order to do things like gifting and planning for Medicaid, your power of attorney must be specifically authorized in the power of attorney document.  That’s where proper advice from a seasoned and highly rated attorney can make all the difference.

#5          A financial durable power of attorney must contain provisions allowing for the attorney-in-fact to obtain control over digital assets and things like email.

A digital asset is generally defined as an asset that either exists online (like an online bank account) or which exists in a digital form (Bitcoin for example) or which can be accessed only by digital means (email).

Where a power of attorney matters is when a person loses competence and their attorney-in-fact can access any digital assets they own by virtue of, first, a properly drafted power of attorney document which specifies digital asset management and control for the POA and second by having the ability to request credentials (username / password) via the document.

#6          A power of attorney document can include the power to either change beneficiaries or to add beneficiaries to various assets of the principle so that they coincide with the principle’s wishes.

Imagine Fred creates a living trust and a durable financial power of attorney in 2015.  In 2021, he becomes incompetent.  The attorney-in-fact takes over paying Fred’s bills and the filing of tax returns.

However, while learning of Fred’s assets, he notices that none of Fred’s assets are either owned by the living trust he created or have the trust listed as a beneficiary.  This is a probate waiting to happen.

The power of attorney does contain provisions to add beneficiaries to various accounts.  This is obviously crucial for when Fred passes away.  Thanks to a properly drafted power of attorney, however, the chose attorney-in-fact can make these changes for him.

Conclusion

As the foregoing makes clear, a durable financial power of attorney is an absolute necessity for anyone creating an estate plan.