Insight

What is a Power of Attorney?

What is a Power of Attorney?

George M. Riter

George M. Riter

May 29, 2019 11:28 AM

It is estimated that only 25-30% 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.

Our next blog will discuss a Durable Health Care Power of Attorney/Living Will.

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

Trending Articles

How Palworld Is Testing the Limits of Nintendo’s Legal Power


by Gregory Sirico

Many are calling the new game Palworld “Pokémon GO with guns,” noting the games striking similarities. Experts speculate how Nintendo could take legal action.

Animated figures with guns stand on top of creatures

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

The U.S. Best Lawyers Voting Season Is Open


by Best Lawyers

The voting season for the 31st edition of The Best Lawyers in America® and the 5th edition of Best Lawyers: Ones to Watch® in America is officially underway, and we are offering some helpful advice to this year’s voters.

Golden figures of people standing on blue surface connected by white lines

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

How To Find A Pro Bono Lawyer


by Best Lawyers

Best Lawyers dives into the vital role pro bono lawyers play in ensuring access to justice for all and the transformative impact they have on communities.

Hands joined around a table with phone, paper, pen and glasses

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?

2021 Best Lawyers: The Global Issue


by Best Lawyers

The 2021 Global Issue features top legal talent from the most recent editions of Best Lawyers and Best Lawyers: Ones to Watch worldwide.

2021 Best Lawyers: The Global Issue

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

The Upcycle Conundrum


by Karen Kreider Gaunt

Laudable or litigious? What you need to know about potential copyright and trademark infringement when repurposing products.

Repurposed Products and Copyright Infringemen

The Best Lawyers in Australia™ 2024 Launch


by Best Lawyers

Best Lawyers is excited to announce The Best Lawyers in Australia™ for 2023, including the top lawyers and law firms from Australia.

Australian Parliament beside water at sunset

Best Lawyers Voting Is Now Open


by Best Lawyers

Voting has begun in several countries across the globe, including the United States, the United Kingdom and Europe. Below we offer dates, details and answers to voting-related questions to assist with the voting process.

Hands holding smartphone with five stars above phone

Inflation Escalation


by Ashley S. Wagner

Inflation and rising costs are at the forefront of everyone’s mind as we enter 2023. The current volatile market makes it more important than ever to understand the rent escalation clauses in current and future commercial lease agreements.

Suited figure in front of rising market and inflated balloon

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

A Celebration of Excellence: The Best Lawyers in Canada 2024 Awards


by Best Lawyers

As we embark on the 18th edition of The Best Lawyers in Canada™, we are excited to highlight excellence and top legal talent across the country.

Abstract image of red and white Canada flag in triangles

Announcing The Best Lawyers in South Africa™ 2024


by Best Lawyers

Best Lawyers is excited to announce the landmark 15th edition of The Best Lawyers in South Africa™ for 2024, including the exclusive "Law Firm of the Year" awards.

Sky view of South Africa town and waterways

Presenting the 2024 Best Lawyers Family Law Legal Guide


by Best Lawyers

The 2024 Best Lawyers Family Law Legal Guide is now live and includes recognitions for all Best Lawyers family law awards. Read below and explore the legal guide.

Man entering home and hugging two children in doorway