What Should I Know About a Financial Power of Attorney
A financial power of attorney (POA) is a document that grants someone else (the agent) the authority to manage your (the principal) finances if you are no longer able to do so. It’s important for everyone, regardless of age or net worth, to consider creating a POA to protect themselves and their loved ones in the event of an unexpected illness or disability.
Naturally, you may be feeling overwhelmed about taking on this responsibility as an agent, but that's why I'm here to help. Follow my lead on how to move forward when given the financial power of attorney.
Slow Down - Don't Panic
Take your time in reviewing the POA document and be sure to get clarification on anything in the document you feel uncertain about. It is important that you fully understand the responsibilities you have and what to do with them in the best interest of your loved one.
Make a List
Often, the principal may already have organized a list of assets and liabilities for you. However, if this is not the case here is what you will need:
Retirement accounts
Mortgage papers
Tax bills
Utility, phone, cable, and internet bills
Brokerage and bank accounts
Insurance Premium Invoices
Be sure not to miss any recurring expenses in any of their accounts and keep an eye on their mail for at least a month to help you determine where their money comes and goes. With almost everyone going digital these days, you may likely need to contact their financial institutions and make them aware that you have power of attorney over the accounts and will need access.
Secure the Principal's Assets
You may want to film a video inventory of your loved one's residence especially if it seems they may be incapacitated for an extended period. Be careful of anyone taking property from the residence even if it is family saying they were promised the item at some point in time.
Pay All Bills and Taxes
As mentioned before, monitor any bills, credit card statements, recurring payments, and taxes. It may be best to cancel any credit cards that likely won't be used just be mindful of any payments due or unrelated bills on auto-pay with that account.
In most cases, you will be given the ability to pay the principal's taxes. If this is the case for you, you'll now be responsible for filing their taxes moving forward on their behalf. If the principal has passed away, the executor of the will is responsible and will prepare the taxes for you.
Discuss Estate Planning
You must find out if there is an estate plan in place and reach out to an estate planning attorney for assistance before taking any steps toward managing their assets. You can start by searching through any documents, however, if you're unable to find any evidence of this you'll need to reach out to your estate planning attorney.
In the case that your loved one is living in a nursing home paid for by Medicaid, you'll want to speak with an elder law attorney to secure at least some of the costs of their care.
Keep Track of Records
Keep a record of any expenses you've paid on your principal's behalf and any responsibilities you have handled as an agent. You'll need to refer to these records in the future to show you acted in your loved one's best interests and will provide evidence for any reimbursements you are owed for the expenses.
Florida Financial Powers of Attorney
If you aren't sure of what decision to make for your principal, you can always reach out to the attorney who prepared the POA. It is my goal to provide my clients with the guidance and support they need through these complicated decisions during difficult times.
If you have any further questions or need more information on estate planning, contact me, Elaine McGinnis at (813) 851-3380.