Financial power attorney (POA) is a set of documents that you’re giving your agent the ability to act and make financial decisions on your behalf. They’re most commonly used in an elder law scenario. They can also be used in a crisis scenario, if you are overseas, a business owner, and you need to elect someone to make those decisions on your behalf.
Are There Different Types of Powers of Attorneys?
General and Limited:
A general power of attorney gives your agent the ability to govern any part of your estate plan. Whereas, a limited power of attorney is restricted from having control over certain aspects of your estate that you deem fit.
Springing and Current:
A springing power of attorney only allows your agent to act when a certain offense occurs. Whereas, a current power of attorney can act at any time. We recommend that clients have a current power of attorney because it can be difficult to really point out a point time when the springing power returning comes into effect.
How Do I Know if My Financial POA is Up-To-Date?
Financial power of attorney laws changed in 2012, so if you have not updated your power of attorney since then, you’ll want to get it updated as soon as possible.
In addition, you’ll want to look for hot powers in your financial power of attorney, which are:
- Gifting Powers
- Powers Over Beneficiary designations
- Powers Over Retirement Accounts
- Ability to Make Trusts
- Safety Deposit Boxes
These are the hot powers, and if you don’t have those, then financial institutions may not warrant your financial power of attorney. It’s really important that you look for these in your document.
Estate planning can seem like a big hassle because they are so many levels which require close detail. If you want to make sure your financial POA is up-to-date and can really act on your behalf, contact us at Baron Law today.