Autumn Years Summer 2023

FINANCIAL PLANNING

Power of Attorney: What You Need to Know By Nicholas Stratton A power of attorney is an essential tool in planning for the possibility of becoming incapacitated and needing someone to manage your affairs on your behalf. These legal documents can grant broad authority

to one or more power of attorney agents to transact business or make medical decisions based on your behalf.

THE DIFFERENT FORMS OF A POWER OF ATTORNEY A “power of attorney” can come in many different forms depending on your needs and goals. First, a power of attorney may be “general” or “limited.” The word “limited” narrows a power of attorney’s authority to transact business only to specific matters, property or with an agent’s limited access to funds. Regardless of whether the power of attorney is general or limited, it may also be “durable” or “non-durable.” A “durable power of attorney” remains in effect until the person revokes the docu ment or upon his or her death while a “non-durable power of attorney” would revoke upon the principal’s incapacity. Finally, a power of attorney may be effective immediately upon signing. Al ternatively, it may be “springing,” which means that it would only be effective once you are deemed legally incapacitat ed. A “medical power of attorney” is a springing, limited, durable power of at torney and permits healthcare decisions on your behalf. The document may also include sections similar to a living will, guiding the agent and doctors’ medical decisions based on your wishes.

THE ROLE OF A FINANCIAL POWER OF ATTORNEY A financial power of attorney can have the authority to perform some or all of tasks below and must always act in your best interest, keeping accurate records and avoiding conflicts of interest. • Pay everyday expenses for you and your family with your assets • Maintain, pay taxes on, sell, buy and mortgage real estate and other property • Collect government benefits including Medicare, Social Security, Disability and more • Invest your money in mutual funds, stocks and bonds • Transact with banks and other financial institutions • Buy and sell annuities and insurance policies on your behalf • File and pay your taxes • Operate your small business • Claim inheritance or other property to which you are entitled

Like your will, power of attorney documents require drafting according to the laws of the state in which you live and some forethought of your selection of agents. Every state has laws govern ing the creation and use of valid power of attorney documents. While each state should honor a valid power of attorney from another state, residents of multiple states and snowbirds who routinely trav el and transact business in other states may benefit from having an attorney in each state review the power of attorney to ensure local institutions will not give the agent a hard time when they rely on the power of attorney. Take note that if your spouse is your power of attorney, this designation does not automatically end when you finalize a divorce.

22 AUTUMN YEARS I SUMMER 2023