Broad power of attorney can enable a proxy to act on a representative basis in a variety of situations. If authorized, the agent can take care of the client’s personal care, manage the client’s assets, carry out estate planning, support relatives, give gifts (e.g. let’s discuss.
If the client needs personal care at home, in a hospital or in a care facility, an authorized representative can conclude the care contracts and use the client’s financial resources to cover the costs. The agent represents the client’s interests and bears the health costs approved by the agent in accordance with the client’s living will. Often one and the same person is the agent who acts in both functions.
The management and use of bank and broker accounts, including retirement accounts, depends on the financial institution’s acceptance of the power of attorney. They are often reluctant to do this unless the power of attorney is on a separate form designed by their own legal department. These powers are limited to account management with only one institute and are limited in time. They are necessary additions to the generally valid permanent power of attorney.
Power of attorney can also be used for estate planning. It can authorize the agent to set up a trust and transfer the client’s assets to a trust on behalf of the client in order to avoid inheritance. Avoiding an estate is especially important to the family of people receiving Medi-Cal as estate repayment only applies if there is an estate.
In addition, the authority may also authorize – or not authorize – an agent to use Death Beneficiary Forms to designate Death Beneficiaries (POD), Death Transfer Broker Accounts (TOD), and retirement plans (e.g., IRAs and 401 (k) s).
If the principal is helping someone financially, the agent can be empowered to continue that assistance. This is particularly relevant for supporting dependent adult children or parents. For example, continuing to pay for a child’s car insurance and a scholarship while studying. Also, for example, to pay the incidental costs of a dependent parent.
Nowadays it is important for digital (online) financial investments to enable an agent to access such online accounts if the agent does not know the login user name and password of the client. The same consent language can authorize access to email and social media accounts that are no longer accessible.
Explicit restrictions and prohibitions can be included to prevent abuse of a power of attorney. For example, the document can prohibit an agent from converting beneficiaries into accounts in the event of death.
A power of attorney can become effective either immediately upon signature or later if the principal becomes incapable of doing business. Powers of attorney expire upon revocation (if the principal is revocable) or upon the death of the principal.
Without a power of attorney, an expensive, time-consuming and aggravating court-supervised monument preservation procedure is often required in order to regulate the legal, financial and property matters of a disabled person. Conservatories can be challenged, resulting in expensive and time-consuming litigation.
The foregoing is a general discussion and not legal advice. If you need help with such questions, contact a qualified lawyer.
Dennis A. Fordham, Attorney at Law, is a certified estate planning, estate and trust law specialist. His office is located at 870 S. Main St., Lakeport, California. He can be reached at [email protected] and 707-263-3235.
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