Financial Power of Attorney

Purpose: The Statutory Durable Power of Attorney is an essential estate planning document. It deals with money, property, financial actions, and administrative matters. It is very often a critical document in setting up trusts (for probate avoidance) and for the Medicaid Planning qualification process.

How it Works: In a financial power of attorney, one person is giving another the power to handle his or her affairs in the event they are not able to do so. These powers either go into effect upon disability or they remain in effect if a person is disabled. When a person dies, all powers of attorney cease to function. The power of attorney is null and void once a person dies. After death, the Last Will and Testament, the Living Trust, joint account with right of survivorship, or beneficiary designations govern the distribution of property.

Licenses to Steal: Financial powers of attorney are often called “licences to steal” since they have been involved on countless occasions in unauthorized or intended transfers of property to one child or individual instead of the beneficiaries that were intended under a person’s Will, for instance. Therefore, selection of a trustworthy and honest agent is critical.

Why Its So Important: Since financial powers of attorney are frequently misused, one might think that there would be an advantage in not creating one. However, many, if not most elderly people, will reach a point when they need the honest and loving attention of someone to help with their financial affairs. Without a financial power of attorney, a family member may not be able to do important actions for the elderly person. In some cases, this may force the need to go to court and establish a Guardianship. Establishing a Guardianship is expensive and time-consuming. Therefore, most people need to select one or more people to act as the person’s agent under a Financial Power of Attorney.

All Forms Are Not the Same: Powers of Attorney can be written in many different ways. At the Bond Law Firm, ours are customized to fit our client’s needs. They are tailored to provide the powers necessary to do Medicaid planning for nursing homes or VA assisted living benefits planning to help pay for support services needed.