Responsibilities of Power of Attorney Agent to Account for Financial Activities to Family Members
What Are the Duties for Financial Powers of Attorney?
I only got appointed amanuensis under a fiscal power of chaser. What practise I need to do next?
Has a loved i named yous their financial power of chaser? Are you lot ready to take on all the responsibilities that entails? Hopefully, you won't be called into activity anytime soon, but with the coronavirus pandemic continuing, it's something to think about.
A financial power of attorney is a certificate allowing someone (the "chaser-in-fact" or "agent") to act on the primary's behalf. It normally allows the attorney-in-fact to pay the principal'southward bills, access his accounts, pay his taxes, purchase and sell investments or even real estate. Essentially, the attorney-in-fact steps into the shoes of the principal and is able to human action for the primary in all matters every bit described in the document.
These responsibilities may sound daunting, and it'south simply natural to feel a little overwhelmed at starting time — much similar when nosotros had our start child and the infirmary staff left us lonely with the baby for the first time: What do we practice now?!
This article was written by and presents the views of our contributing adviser, non the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
Step one: Don't panic. Do start reading.
Read your power of attorney document and understand what the person y'all are caring for (the "primary") has given you power to handle on their behalf. Many powers of attorney also include information addressed to the amanuensis (typically at the cease of the document) that explains the legal duties they owe to the primary.
Footstep two: Figure out what y'all are in charge of.
Brand a list of the principal'south assets and liabilities. If the person y'all are caring for is organized, and then that will like shooting fish in a barrel. Otherwise, y'all will need to find:
- Brokerage accounts
- Depository financial institution accounts
- 401(one thousand)due south/IRAs/403(b)s
- Mortgage bills
- Tax bills
- Utility bills
- Insurance bills
- Phone, cable, internet bills
It's also wise to review your main's spending patterns, to get a sense of whatever recurring expenses. Monitoring your principal's mail for a month will help you to figure out where the money comes and goes. Also effort to find where they keep their bills, particularly their tax bills. And if your principal is over historic period 72 and has granted you authority to manage their retirement plan, don't forget to brand any required minimum distributions.
Annotation, if your principal manages his or her finances online, then y'all will demand to contact the relevant institutions and establish that you lot have power of attorney, so that you can take admission to these accounts.
Step iii: Protect the principal's avails.
Make sure the principal's home is secure. Check information technology for leaks and any damage that needs to exist addressed. Information technology may also be helpful to record a video inventory of the residence. If the primary isn't occupying the dwelling while incapacitated, pass up the heat (merely don't allow the pipes freeze). If you aren't worried almost freezing pipes, y'all tin plow off the lights and the gas. Is mold an issue in the area? If so, so you lot had better continue the air conditioning on to prevent an expensive infestation. Is dry heat a trouble, like in the desert? Desert dwellers have tricks to seal up a business firm to prevent the wood floors from cracking and other damage from dehumidification. If you lot are not local, inquire the neighbors what to do.
If it appears your chief will exist incapacitated for a long time, consider canceling the phone and any newspaper subscriptions. Consider putting their car on blocks and draining the oil.
Proceed an eye out for potential poachers! Information technology'south a pitiful fact, but sometimes the family unit of an incapacitated person volition take belongings and claim that information technology had been promised to them (or that it belonged to them all along). It may be prudent to change the locks on the chief'southward domicile. Also annotation that an unoccupied residence may exist noticed by squatters, so visit the location every calendar week if no 1 lives there.
If you have power over the primary'south investments and foresee the incapacitation continuing for the long term, take a shut expect at whatsoever brokerage statements for high-run a risk positions that you don't understand, such as options, puts and calls, or commodities. Seek advice on liquidating positions that y'all don't accept the expertise to handle.
If you are non local to the principal, you are going to be inconvenienced; this is something to consider when making out your own power of attorney. You can delegate many of your duties to a property manager, such as checking on the firm and fetching the mail. Nevertheless, you should brand at to the lowest degree one trip yourself to make certain yous have a good grasp of the state of affairs. I would not hesitate to talk to the neighbors and have them proceed an eye on things; they don't want squatters or crimes next door any more than you practise.
Step 4: Pay bills as necessary.
Be certain to review your principal's bills and credit card statements for potential fraud. Consider temporarily suspending credit cards that you volition not be using on the primary'southward behalf. Call back, however, that some people accept monthly bills paid automatically by credit bill of fare. If that's the example, be certain to brand alternative arrangements to pay those bills if you append a carte du jour.
Pace v: Pay the taxes.
Many powers of chaser grant the amanuensis dominance to pay the primary's taxes. If this is the case, you will be responsible for filing and paying taxes during the main's lifetime. If the master passes away, nonetheless, the executor of the principal'southward volition is responsible for preparing any final taxes. You should nevertheless be prepared to help if needed.
Footstep 6: Estate planning.
If the person you lot are caring for does not take a trust, you should consider setting 1 up for them (assuming the power of attorney grants you that authority). This is specially important if the primary is gravely ill. Speak with a qualified attorney for help. Agents cannot write a will for their main, but estate planning while the principal lives will often reduce costs later on.
If your principal is in a nursing domicile that it is being paid for by Medicaid (or a similar state insurance program), and so it is extremely of import you lot speak with an elder law attorney as soon as possible. You may be able to save the principal'due south manor at least some of the costs of their care.
If yous have not spoken with an elder law attorney, then the best communication I tin can requite is "don't sell the house." As long as someone told Medicaid that the principal intended to move back dwelling house after, then yous will not have to sell the firm to pay the bills. If – on the other hand - yous sell the house and now have money, the regime volition require you to spend that money on the person'southward wellness care. Endeavor to avert this.
Step 7: Continue excellent records.
Track every expenditure that you brand, and every action yous take, on your principal's behalf. Not only is diligent record-keeping required, it as well will help you demonstrate that you have upheld your duties and acted in the chief'southward best interests. It volition also be important for you to receive reimbursement for expenses, and (if the ability of attorney provides for information technology) the time you spent interim equally amanuensis.
Step 8: Act in the principal's all-time interest.
If you know what the chief expects you lot to do with his or her belongings, then endeavor to honour those expectations when reasonably possible. If you lot don't know the master's expectations, then always act with their best interests in mind.
Written by Jeffrey Gaffney, a 25-year attorney and retired Navy captain. A graduate of the University of San Diego Schoolhouse of Police, he began his practice helping aggrieved investors recover from unscrupulous stockbrokers. He is an arbitrator for the New York Stock Exchange, the Pacific Stock Exchange and FINRA. Gaffney also serves as a legal fellow with FreeWill, a digital manor planning platform. After years of securities work, he inverse his emphasis to trusts and estates equally a way to further protect people and their futures.
This commodity was written past and presents the views of our contributing adviser, not the Kiplinger editorial staff. You tin can cheque adviser records with the SEC or with FINRA.
Jeffrey Gaffney
Chaser at Police, Law Office of Jeffrey Gaffney
Jeffrey Gaffney is a 25-year attorney and retired Navy helm. A graduate of the University of San Diego Schoolhouse of Law, he began his exercise helping aggrieved investors recover from unscrupulous stockbrokers. He is an arbitrator for the New York Stock Exchange, the Pacific Stock Exchange and FINRA. Gaffney also serves as a legal fellow with FreeWill, a digital estate planning platform. After years of securities work, he changed his emphasis to trusts and estates as a way to further protect people and their futures.
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Source: https://www.kiplinger.com/slideshow/retirement/t021-s014-what-are-the-duties-for-financial-powers-of-attorn/index.html
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