When Do You Need a Financial Durable Power of Attorney?

power of attorney

The Merriam-Webster dictionary provides a simple definition of Caregiver as “a person who gives help and protection to someone (such as a child, an old person, or someone who is sick)”. In past FamilyAffaires.com articles, I have often referred to the Sandwich Generation.  Sandwich Generation, simply defined, is a generation of people, typically in their thirties or forties, responsible for bringing up their own children and for the care of their aging parents.

AARP provided a report in 2013 that showed that in the year 2010 11.6% of women aged 80 to 84 were childless and that number is projected to jump to 16% in the year 2030. Where the sandwich generation will or should provide for the care of their aging parents, those without children will need an extended family member, a friend or a professional to fill this role.

For those without children, planning for incapacity can become very worrisome.  If faced with incapacity, whether it is temporary because of an accident or illness or life lasting because of advanced age, you must ask yourself today:
• Who will pay my bills?
• Who will attend to my investments?
• Who will manage my real estate?
• Who will attend to all my financial matters?
The easiest, but maybe not the best solution, is to sign a financial durable power of attorney. This power of attorney allows another person to step into your shoes, financially speaking, and make decisions on your behalf.  A durable power of attorney can be drafted to be as liberal or specific as needed to make you comfortable. This is a very important document and should not be a do-it-yourself project.  Meaning don’t copy and sign a power of attorney form from the internet and think you are okay.  You definitely need the services of an elder law attorney to have the power of attorney discussed, prepared and then signed by you.
I mentioned that a power of attorney may not be the best solution.  Will the person you are entrusting with your financial well- being be 1) available when needed; 2) if a contemporary have his or her capacity to help you or for that matter be alive;  and 3) if that person is a beneficiary of your estate manage the finances with your interests first or theirs?
A standby living trust can provide financial protection in the event of disability or incapacity, as a durable power of attorney does but with more structure and direction. You can appoint the same person you were going to name in your power of attorney as a co-trustee with a professional trustee. Should the individual co-trustee not survive you or not have his or her capacity to serve when needed, the trust agreement would make provision for an alternate individual co-trustee.
When speaking with an elder law attorney about a financial durable power of attorney bring up the subject of a standby living trust.

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About Ira Brower

I have been in the financial service industry for more than 40 years primarily providing wealth management solutions for retired and soon-to-be retired individuals. I am President and Founder of Garden State Trust Company. Our clients depend on us for elder care solutions, such as; trust and estate planning, investment services, and lifestyle management. We also administer to “special needs” or “supplemental needs” trusts. www.gstrustco.com

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