Insight

Most Americans Lack a Power of Attorney for Assets

Only 25 percent of American households have estate planning documents in place. A Power of Attorney for Assets will secure your financial affairs should you be unable to do so yourself.

Power of Attorney for Assets Documents
George M. Riter

George M. Riter

June 5, 2019 04:59 PM

It is estimated that only 25 to 30 percent of U.S. households have estate planning documents in place. This means that most people do not have documentation in place to address how they wish their financial affairs to be handled during their lifetime if they are not able to do so on their own. This blog will address Powers of Attorney for Assets.

A Power of Attorney for Assets (POA-Assets) allows you to designate someone else to step into your shoes and continue to handle your financial affairs when you are no longer able to do so on your own. Depending on how it is drafted, the POA-Assets can allow someone to assist you with your financial affairs if you just care to transfer that duty to someone else or step in and keep your financial affairs in order if you are not capable of doing so on your own. However, who you designate as your agent under the POA-Assets and the powers that you convey to that person must be carefully considered.

When individuals are married, or in long-term relationships, they often designate their spouse, partner, or competent adult child as their agent under the POA-Assets. If that is the case, you must also consider what types of powers you are conveying to the designated person. Some practitioners have a template POA-Assets and fill in the names of the designated person without giving serious thought to what powers are being conveyed to the designated person. Care must be taken to understand the overall relationship between the person creating the POA-Assets and the designated individual. The powers under the POA–Assets must be tailored to the situation.

For example, many spouses or partners have joint assets. Therefore, each joint owner has the ability to access those assets now, and that access is not dependent on the existence of a Power of Attorney. However, for assets in a person’s name, or retirement accounts (IRAs, 401ks, qualified stock options, and the like), a POA-Assets can be very important in continuing to manage the individual’s assets and make sure they exercise any required withdrawals or elections.

If a POA-Assets is drafted very broadly, the person drafting and preparing the form must make sure that there are proper safeguards in place so as to eliminate, to the greatest extent possible, the potential for the abuse of the powers conveyed. Far too often, there are stories about elderly people losing their assets or their home because someone misused the powers under a POA-Assets.

There are a number of forms that a POA-Assets can take. One is that it is effective immediately, and once it is signed, the designated person can take the document to a bank or investment house and the like and act as if he or she was the person who owned the account. That type of document should only be used when the designated person is a spouse, family member or long-time advisor, and they understand that they are responsible for properly caring for the individual’s finances.

There is also a “springing” POA-Assets. This document is valid once it is signed, but the designated person cannot act until one or more physicians certifies in writing that the person who created the POA-Assets is no longer able to carry out and handle their own personal affairs. This allows protection and reduces the likelihood of abuse while the person is still competent, but care must still be taken to make sure that the powers are tailored to the situation.

If you have any questions regarding a Power of Attorney for Assets, please contact a member of our Estate Practice Group.

Related Articles

Protecting Your Legacy With Estate Planning


by Tripp Wiles

You're careful with your finances; do you still need asset protection?

Protecting Your Legacy With Estate Planning

Is It Time for You to Have the Long-Term Care Planning Talk With Your Parents?


by Anthony J. Enea

How should you talk to your parents about long-term care options? Estate planning can make for a difficult conversation, but wills and trusts are necessary documents for anyone growing older.

Estate Planning for Parents Guide

The New PPE


by Jennifer Stavros

How to plan your pandemic preparedness estate—all from the safety of home.

Planning Your Digital Estate Plan

Trending Articles

Announcing the 2023 The Best Lawyers in America Honorees


by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

Best Lawyers: Ones to Watch in America for 2023


by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

Announcing the 2022 Best Lawyers® in the United States


by Best Lawyers

The results include an elite field of top lawyers listed in the 28th Edition of The Best Lawyers in America® and in the 2nd Edition of Best Lawyers: Ones to Watch in America for 2022.

2022 Best Lawyers Listings for United States

Famous Songs Unprotected by Copyright Could Mean Royalties for Some


by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?

Announcing the 2023 The Best Lawyers in Canada Honorees


by Best Lawyers

The Best Lawyers in Canada™ is entering its 17th edition for 2023. We highlight the elite lawyers awarded this year.

Red map of Canada with white lines and dots

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

What the Courts Say About Recording in the Classroom


by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

Announcing the 2022 Best Lawyers in Canada™


by Best Lawyers

The results include an elite field of top lawyers listed in the 16th Edition of The Best Lawyers in Canada™ and 1st Edition of Best Lawyers: Ones to Watch in Canada.

Announcing the 2022 Best Lawyers in Canada™

Caffeine Overload and DUI Tests


by Daniel Taylor

While it might come as a surprise, the over-consumption of caffeine could trigger a false positive on a breathalyzer test.

Can Caffeine Cause You to Fail DUI Test?

The Real Camille: An Interview with Johnny Depp’s Lawyer Camille Vasquez


by Rebecca Blackwell

Camille Vasquez, a young lawyer at Brown Rudnick, sat down with Best Lawyers CEO Phillip Greer to talk about her distinguished career, recently being named partner and what comes next for her.

Camille Vasquez in office

Announcing the 2022 "Best Law Firms" Rankings


by Best Lawyers

The 2022 “Best Law Firms” publication includes all “Law Firm of the Year” recipients, national and metro Tier 1 ranked firms and editorial from thought leaders in the legal industry.

The 2022 Best Law Firms Awards

Wage and Overtime Laws for Truck Drivers


by Greg Mansell

For truck drivers nationwide, underpayment and overtime violations are just the beginning of a long list of problems. Below we explore the wages you are entitled to but may not be receiving.

Truck Driver Wage and Overtime Laws in the US

All Eyes to the Ones on the Rise


by Rebecca Blackwell

Our 2023 honorees recognized in Best Lawyers: Ones to Watch™ in America tell us more about how their path to law formed, what lead them to their practice areas and how they keep steadfast in their passion to serve others.

Person walking between glass walls towards window

Announcing The Best Lawyers in Australia™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Australia.

The Best Lawyers in Australia™ 2023

Announcing the 2022 Best Lawyers™ in Australia


by Best Lawyers

The results include an elite field of top lawyers and firms.

Announcing the 2022 Best Lawyers™ in Australi

The Key to Success? Be Prepared to Walk Away


by Sara Collin

Oatley Vigmond partner and The Best Lawyers in Canada awardee Brian M. Cameron discusses his illustrious career and techniques for trial and negotiation that have led to his success.

Man with grey hair and red tie