KY Financial Power of Attorney Lawyers
Estate planning is one of those things in life that people wish they had done once it’s too late — like wishing you had worn your seatbelt in that second before a car crash or had invested in a fire extinguisher as your dinner burns on the stovetop.
Regret is a powerful, yet avoidable, emotion. What’s important is to start the planning process and remember that most decisions that you make can be changed later on. One of the most essential parts of every estate plan is a financial power of attorney.
When you’re ready to discuss developing an estate plan for you and your family, the Lexington, KY financial power of attorney lawyers at Bunch & Brock are here for you. We understand that everyone has different goals, and we create personalized, comprehensive plans tailored to each client’s unique circumstances. We work hard to ensure that the finished product offers peace of mind and confirmation that you’ve done right by yourself and your loved ones. Put our experience to work for you. Contact us today by calling 859-254-5522 or filling out this online form.
What is a power of attorney?
A power of attorney (POA) can refer to either healthcare or finances. A healthcare power of attorney is not the same as a financial power of attorney, and you can have one without having the other. A financial power of attorney lets you give someone else the legal authority to act on your behalf in the event you become incapacitated. Designating an agent to manage your financial affairs in advance prevents the uncertainties that can result if a court must appoint a guardian or conservator to make the decisions for you.
Who are the parties involved in a financial power of attorney?
The person who executes the financial POA is called the “principal” while the person who is chosen is referred to as the “attorney-in-fact” or the “agent.” Most principals choose a trusted family member or close friend to be their agent, but deciding who is the best fit for the role can be difficult. Selecting a second person to act as an alternate in case your initial choice is unable or unwilling to serve is also a good idea. Qualities to consider include trustworthiness, sense of loyalty, assertiveness, location, availability and financial understanding. Avoid people that you don’t feel you could share intensely personal information with and those who have shown that they aren’t financially savvy enough to handle their own fiscal affairs.
To be effective, a financial power of attorney must be put in writing and properly signed to be effective. The principal should keep the original in a safe place and give copies to the agent, the alternate agent, family members, and affected institutions such as his or her bank, brokerage firm, lawyer, and accountant.
What powers does an attorney-in-fact have?
An attorney-in-fact does not have any ownership rights in the principal’s property. For example, an agent does not suddenly become the joint owner of the principal’s bank account. A POA only grants access, and any money taken or used should be for the benefit of the principal. There is no guarantee ,however, that the person you trusted to care for your financial well-being will do so. One way to limit the potential for abuse is to be selective in the person you grant powers. An agent can be given a narrow scope of responsibility or a broad range such as:
- Administering investments
- Claiming, selling or transferring property
- Filing tax returns
- Paying day-to-day expenses
- Managing mortgage payments, retirement funds and insurance
- Collecting government benefits
- Handling bank transactions
- Accessing safe deposit boxes
- Overseeing small business operations.
What kinds of powers of attorney are there?
A conventional (or nondurable) power of attorney is used to address specific situations at set times. For example, if you are selling your house and cannot attend the closing, you can give someone the limited authority to execute the deed in your absence. The authority it gives begins upon signing and ends upon the principal’s mental incapacitation.
A springing power of attorney begins only when a specific event happens, such as illness or disability of the principal. This type of financial POA must be carefully drafted so that it is clear at what point the event has “sprung.”
A durable power of attorney begins when it’s signed and remains in effect unless revoked and continues through any mental disability or incapacity. While this type is most commonly used to enable an agent to act when the principal cannot handle financial affairs as a result of illness or accident, it can also be used when the principal is fully capable, yet desires the agent’s assistance.
All financial powers of attorney expire at the time of the principal’s death, which means that the attorney-in-fact has no authority to make decisions after that time. The authority also ends if revoked by the principal, invalidated by the court, or the agent is no longer able to serve and no successor has been appointed.
We can help
A financial power of attorney is a relatively simple, affordable instrument, and an essential part of almost any estate plan. The experienced Kentucky durable POA attorneys at Bunch & Brock understand that each estate plan must be as unique as the person it serves, and we have worked hard to protect the best interests of hundreds of clients faced with the questions that concern you now. We are committed to providing our clients with a high level of personal service, and we will walk you through each of the steps that must be taken. Whether you’re planning for your own future or for the future of a loved one, we can help. To schedule an initial consultation, please call 859-254-5522 or fill out this online form.