Guide to Your Financial Power of Attorney

Transcription

1 Guide to Your Financial Power of Attorney

2 Your LegacyWriter Financial Power of Attorney A power of attorney gives someone you trust the legal authority to act on your behalf. Depending on your individual circumstances, you may give this person vast or limited power to act on your behalf. The durable power of attorney for finance allows the person to act on your behalf regarding only financial matters; it does not give someone the power to make medical decisions or personal decisions for you. This Guide to Your Financial Power of Attorney is intended to help you do the following: page 2 Understand each section of your power of attorney. page 4 Ensure that your power of attorney is legally valid. page 5 Provide definitions for legal terms you may find in your power of attorney. page 6 Answer common questions about the power of attorney. page 8 Notarizing your documents.

3 2 Understanding Your Financial Power of Attorney I Understanding Your LegacyWriter Financial Power of Attorney Listed below is a summary of the sections of your power of attorney. If, after reviewing your power of attorney, you would like to make changes to any provision, please follow the instructions found later in this guide. Creation This paragraph identifies the principal and principal s state of residence and names the agent and successor agents (if selected) who will have power of attorney. Effectiveness This section identifies when the power of attorney becomes effective. There are two options: 1. Effective Upon Disability If the power of attorney is effective upon disability, the agent will have the power upon your disability and throughout the duration of the disability. 2. Effective Immediately If the power of attorney is effective immediately, the agent will have the power to make these decisions immediately upon the completion of the document signing process. When Successor Agent is Entitled to Act If you have named more than one agent, this paragraph explains when the successor agent s power of attorney becomes effective. Powers This section outlines the financial powers you have given your agent. LegacyWriter offers the following fifteen financial powers: Power relating to real property transactions. Power relating to tangible personal property transactions. Power relating to stock and bond transactions. Power relating to commodities and option transfers. Power relating to banking and other financial transactions. Power relating to business operation transactions. Power relating to insurance transactions. Power relating to estate, trust, and other beneficiary transactions. Power relating to claims and litigation. Power relating to personal and family maintenance. Power relating to benefits from Social Security, Medicare, Medicaid or other governmental programs or from military service. Powers relating to retirement plan transactions. Power relating to tax matters. Power relating to Medical Care Assistance transfers. Power relating to gift transfers.

4 3 Understanding Your LegacyWriter Financial Power of Attorney Purposes This paragraph describes the purpose of the agent s power: To provide for your support, maintenance, health, emergencies and urgent necessities. Limitations on Powers This paragraph limits the agent s power and prohibits the agent for acting in his/her own benefit. I Understanding Your Financial Power of Attorney Termination and Revocation This paragraph revokes any and all of your former power of attorney documents, which means that once this LegacyWriter power of attorney is executed, it is your only valid power of attorney. If the court appoints a guardian of your estate, this paragraph gives that guardian the power to revoke, suspend, or terminate this power of attorney, upon court approval. This paragraph also outlines the status of the power of attorney should you get divorced or legally separated. General Provisions This section does the following: Describes the recordkeeping and accounting duties of the agent; Releases anyone from liability as long as they were acting in good faith and reliance upon the power of attorney; Absolves the agent from responsibility and indemnifies the agent for liability so long as he/she was acting in good faith; Describes the compensation arrangement you have with your agent; Nominates a guardian for your estate if a court proceeding is initiated to appoint a guardian; Gives the agent authority to initiate court proceedings against third parties on your behalf; Allows third parties to rely on signed photocopies of your power of attorney; Identifies your state law as the law the power of attorney is subject to; and Gives authority to your agent to acquire your medical records protected under HIPAA.

5 4 Ensuring that Your Power of Attorney is Legally Valid I Each state follows certain basic requirements to establish the validity of the power of attorney. If each requirement is not met, the document will not be legally enforceable. Some minor variation might exist from one state to another on a particular specification, but the following are the basic requirements for ensuring the power of attorney is valid and enforceable: Ensuring Your Power of Attorney is Legally Valid Signing and Notarizing In all states but California, you must sign your power of attorney in front of a notary public. In California, you may choose to have it either notarized or witnessed. Witnessing Most states don t require the power of attorney to be signed in front of witnesses. Obtaining the Agent s Signature In most states, the agent does not have to agree in writing to accept the job of handling your financial affairs. However, some states require the agent to sign the power of attorney, an Acceptance of Appointment form or statement, or an acknowledgment form.

6 5 Common Terms Related to Your Power of Attorney Agent: One who is authorized to act for or in place of another; also known as an attorney-in-fact. Durable Power of Attorney: A power of attorney that remains in effect during the principal s incapacity. Estate: Everything owned by the principal, including personal belongings, real estate, savings, investments, life insurance, business interests, and employee benefits. I Common Terms Related to Your Power of Attorney Incapacity: The mental or physical disability rendering a person incapable of manage his or her affairs. Principal: The person who is requiring the agent to act on his or her behalf. Springing Power of Attorney: A power of attorney that becomes effective upon the principal s disability. Successor Agent: The person the principal appoints to serve as agent if the original agent becomes unable or unwilling to serve any longer.

7 6 Commonly Asked Questions I Common Questions About Your Power of Attorney Why is it important to have a power of attorney? The power of attorney allows you to choose someone you trust to handle your financial affairs when you cannot do so yourself. If you should suddenly become incapacitated, you know that someone is there to act on your behalf. Without a power of attorney, your family may have to start a court proceeding to have a judge appoint a guardian or conservator to act on your behalf. How do I choose an agent? The most important aspect of choosing an agent is to designate someone who will act in your best interest. Before choosing an agent, you may want to think about the answers to the following questions: 1. Do I trust this person? 2. Does this person understand my feelings and beliefs? 3. Will the person I choose selflessly follow my wishes? 4. Is this person willing to take on this responsibility? 5. Is this person financially responsible? 6. Will this person seek outside help if he/she ever has questions? When does a power of attorney expire? A durable power of attorney, which is a power of attorney that remains in effect even if the person who created it (the principal) becomes incapacitated, generally does not expire unless one of the following events occurs: The death of the principal. The revocation of the power of attorney by the principal. The power of attorney specifies a date or event upon which the agent s power terminates and that date has arrived or the event has occurred. The purpose of the power of attorney is accomplished. The agent dies or becomes incapacitated and the power of attorney does not name any successor agent. Legal action results in a court ruling that the power of attorney is no longer in effect. A non-durable power of attorney will expire upon the occurrence of any of the events that will cause a durable power of attorney to expire. In addition, unlike the durable power of attorney, a non-durable power of attorney expires when the principal becomes incapacitated.

8 7 Common Questions About Your Power of Attorney What is a springing power of attorney? If a power of attorney contains language indicating that it becomes effective upon disability, then it is a springing power of attorney because it springs into effect upon the incapacity of the principal. This is as opposed to an immediate power of attorney, which is effective as soon as it is executed, regardless of whether the principal is incapacitated. I Commonly Asked Questions Is my power of attorney still in effect after I die? No. The power of attorney terminates upon your death. Once you have passed, your will outlines how your estate is to be handled. LegacyWriter makes it easy to create a last will and testament yourself, customized to your needs. You can create a will in minutes, print and sign it yourself, without an attorney at Can I revoke my power of attorney? Yes. You may revoke the power of attorney at any time, so long as you are mentally capable of doing so. If you would like to revoke your LegacyWriter power of attorney, simply our customer service representatives at: info@legacywriter.com and a Revocation of Power of Attorney form will be mailed to you at no additional charge. You should make sure your agent receives a copy of this form, as well as any third party your agent has been in contact with (insurance company, etc.). If you live in a state that required you to file your power of attorney with the county, you should file your revocation there as well. Does this power of attorney cover medical decisions? No. The durable power of attorney for finance deals only with financial decisions. A durable power of attorney for health care allows an individual designated by you to make medical or personal decisions if you are unable to do so yourself. LegacyWriter offers a durable power of attorney customized to your needs. Simply visit to get started.

9 8 Notarizing Your Documents I A notary public is an official appointed by state government (typically by the secretary of state) to serve the public as an impartial witness in performing a variety of official fraud-deterrent acts related to the signing of important documents. These official acts are called notarizations or notarial acts. Notarizing Your Documents Is my power of attorney legally binding if it is not notarized? Document signing requirements vary from state to state. Please review the LegacyWriter guidelines for executing your power of attorney included with your package to see whether your document needs to be notarized. Where can I find a notary public? Notaries public are generally available at most county offices, such as a county clerk, as well as insurance companies, credit unions, banks and law offices. However, it is important to note that while these businesses may employ a notary, the business may have a policy restricting the type of documents the notaries may notarize. To ensure the notary is able to notarize your type of document(s), it may be a good idea to call the business first to ensure the notary is able to notarize your documents. You can also search for notaries in your area through online notary associations: Notary Rotary: Notary: National Registry of Notaries: What is the cost to notarize a document? Fees vary and can be as much as $10 in some states and as little as 50 cents in others. Notary fees are set by state law. What type of identification will the notary accept for verifying my signature? State Driver s License or State ID card. U.S. passport. Foreign passport stamped by the USCIS. U.S. Military ID. ID card issued by the USCIS. An inmate identification card issued by the United States Department of Justice, Bureau of Prisons, for an inmate who is in the custody of the department. A sworn, written statement from a sworn law enforcement officer that the forms of identification for an inmate in an institution of confinement were confiscated upon confinement and that the person named in the document is the person whose signature is to be notarized.

10 9 Notes I Notes