How Effective Is Your Financial Power of Attorney?

Many people fail to periodically review their financial powers of attorney. (This assumes that they have financial powers of attorney. Many people have no documents at all!) Individuals who have outdated wills likely will also have old and outdated financial powers of attorney.

When did you last look at your financial power of attorney? Do you still want the people named in the document to serve as your financial agents? Have changes occurred that may impact their ability to serve, or your desire to have them serve, as currently designated?

Does your financial power of attorney properly cover such issues as insurance and taxes?

Does your financial power of attorney deal with your retirement benefits? There are certain predictable needs regarding retirement plans in case of disability. For example, the Agent should be authorized to take distributions from the Principal’s retirement plans, create new IRAs or retirement accounts for the Principal, make new contributions to any retirement plan on behalf of the Principal, and roll money from one retirement plan to another. Also, will the plan administrator honor your financial power of attorney?

How old are your powers of attorney? How old are those of your loved ones? Many financial institutions no longer accept powers of attorney that are more than three years old. Also, older powers of attorney will not reflect changes necessary due to changes in the law and in the tax code.

This information was prepared by Lena Barnett & Associates, LLC and is intended only to provide general information. It is neither offered nor intended for use as legal advice, nor is it a substitute for a consultation with an attorney.

© 2006 Lena Barnett & Associates, L.L.C. All Rights Reserved

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