Making Sense of Powers of Attorney
Everything You Need to Know
Financial POA: A financial POA is a limited power of attorney specifically focused on managing financial matters. It allows your agent to oversee investments, pay bills, and handle banking responsibilities. Medical (Health Care) POA: Another limited type, medical POAs allow your agent to make health care decisions to ensure your preferences for treatment and care are followed if you cannot make decisions on your own. Springing POA: Springing POAs become effective only upon a specified event, typically your incapacitation. Choosing an Agent The agent you choose will have significant control over your affairs, making it vital to select someone trustworthy and competent. In addition to understanding your values, your agent should be financially responsible and available when needed. It’s also wise
A power of attorney (POA) is a crucial component of estate planning that enables you to appoint someone to manage your financial, legal, or medical affairs. Understanding the different types of POAs and their functions is essential to ensure your wishes are honored and your interests are protected. Types of Power of Attorney General POA: A general power of attorney grants your agent broad authority to handle financial and legal matters on your behalf, including managing bank accounts, signing documents, and conducting real estate transactions. Durable POA: A durable power of attorney is similar to a general POA but remains in effect if you become incapacitated. Limited (Special) POA: Limited POAs only apply to specific tasks or transactions, such as selling property or managing medical care.
to appoint a successor agent to serve as a backup if your primary choice is unable or unwilling to serve. Legal Considerations Each state has its own POA requirements, so consult with an estate planning attorney to ensure your document complies with local laws. Regularly reviewing and updating your POA, especially after significant life events, is also essential to ensure it remains aligned with your current intentions. With the right plan in place, you can have peace of mind that a trusted individual will manage your affairs as you’d like if you cannot.
AFTER A LOVED ONE’S PASSING Essential Financial and Estate Tasks
Gather financial and legal documents. Ideally, you should know where your loved one’s important documents are, but this isn’t always true. They’ll often be in a home safe, in a bank safe deposit box, or with an attorney. Essential documents to gather include their will, life insurance policies, financial records, and property titles. These are crucial for initiating the probate process, if applicable, and managing the estate. Contact an attorney and executor. In addition to helping gather documents, an estate attorney will guide you through probate if needed and ensure legal obligations are filled, debts are settled, and assets are distributed according to the will. The executor will work closely with the estate attorney to complete these tasks and fulfill your loved one’s wishes.
Notify financial institutions. Quickly contacting banks, credit card
Losing a loved one is an emotional experience, but addressing key financial and legal matters to manage their estate effectively is essential. Staying organized and focused during this challenging time will help you handle your loved one’s affairs smoothly and according to their wishes. Secure property and assets. Immediately following your loved one’s death, secure their residence and other property to prevent unauthorized access. If you are concerned about who has keys, such as cleaning companies and home care providers, consider changing the locks. This is also a good time to inventory valuable assets, including jewelry, heirlooms, and important paperwork. Creating an inventory helps identify items before you remove them — and prevents disputes among heirs.
companies, and insurance providers to notify them of the passing will freeze accounts and prevent unauthorized transactions. It will also ensure benefits such as life insurance payouts are correctly processed. Additionally, inform the Social Security Administration and pension offices to stop payments and, if applicable, begin survivor benefits. Settle debts and file taxes. Identify any outstanding debts, such as loans, credit card balances, or utility bills, and arrange to pay them from the estate’s funds. You need to file the deceased’s final federal and state income tax return, and estate taxes may apply depending on state law. Consult a tax professional or an attorney for help if needed to ensure accuracy and peace of mind during this complex process.
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