A power of attorney authorizes your agent to, essentially, step into your shoes (no matter whether you prefer sneakers or pumps) in order to handle your affairs and conduct business on your behalf. This business includes the business of your everyday life: paying your bills, conducting banking, applying for benefits, filing insurance claims, etc. But much of this cannot be done without a comprehensive power of attorney. We discussed basics at the beginning of the month. Continuing our conversation from earlier this week, let’s look at the rest of the top benefits of having a comprehensive power of attorney as part of your well-planned estate. We’ll countdown from five:
5. Prevents delays in asset longevity planning
A comprehensive power of attorney usually needs to include all of the powers required to do effective asset longevity and protection planning. If the power of attorney does not include a specific power, it can greatly dampen the agent’s ability to complete planning and could result in thousands of dollars lost. While some powers of attorney seem long, it is often appropriate to include all of the powers necessary to carry out proper planning.
4. Protects the agent from claims of financial abuse.
Comprehensive powers of attorney often allow the agent to make substantial gifts to self or others in order to carry out asset planning objectives. This can also help with estate planning and tax planning. Although these powers are not always advised, when they are needed, without the power of attorney authorizing this, the agent (often a family member) could be at risk for financial abuse allegations.
3. Allows agents to talk to other agencies.
An agent under a power of attorney is often in the position of trying to reconcile bank charges, make arrangements for health care, engage professionals for services to be provided to the principal, and much more. Without a comprehensive power of attorney giving authority to the agent, many companies will refuse to disclose any information or provide services to the incapacitated person. This can result in a great deal of frustration on the part of the family, as well as lost time and money. McCreary Law Office supplements the power of attorney with standard HIPAA releases as well, making sure the agent can speak to persons as needed to arrange your medical care. (This is distinguished from the person making your healthcare decisions, which may or may not be the same person as your agent under your power of attorney.)
2. Allows an agent to perform planning and transactions to make the principal eligible for public benefits.
One could argue that transferring assets from the principal to others in order to make the principal eligible for public benefits—Medicaid and/or non-service-connected Veterans Administration benefits—is not in the best interests of the principal, but rather in the best interests of the transferees. A Judge may not be willing to authorize a guardian to protect assets for others while enhancing the protected person’s eligibility for public benefits. However, that may have been the wish of the incapacitated person and one that would remain unfulfilled if a power of attorney were not in place. Further, these assets can work to supplement the incapacitated person’s care if structured carefully.
1. Provides peace of mind for everyone involved.
Taking the time to sign a power of attorney lessens the burden on family members who would otherwise have to go to court to get authority for performing basic tasks, like writing a check, filing an insurance claim, or arranging for home health services. Knowing this has been taken care of in advance is of great comfort to families.
This discussion of the Key Benefits of a Comprehensive Power of Attorney could be expanded by many more. Which benefits are most important depends on the situation of the principal and that person’s loved ones. Moreover, determining which powers you need to grant is a crucial decision in your estate plan. This is why working with an attorney for your comprehensive power of attorney can be so essential: Nobody can predict exactly which powers will be needed in the future. The planning goal is to have a power of attorney in place that empowers a succession of trustworthy agents to do whatever needs to be done in the future.