Power of Attorney

Do I Need a Power of Attorney (POA)?

Yes, you do. Life is unpredictable. A Power of Attorney is a document that appoints an agent (designated by you) to handle your financial affairs. In case you become incapacitated, this is critical.

But if you have a Revocable Living Trust, do you still need a Power of Attorney? After all, if your assets are all titled in the Trust name, and you have designated successor Trustees who manage that property, why do you need a Power of Attorney?

A Power of Attorney, is again prepared as a “companion” document within the Trust Plan. The Trust itself often cannot reach every asset. Certain assets, like retirement plans or IRAs, are not transferred to the Trust for tax reasons. Other issues may exist where a matter (Social Security issue, tax audit, or creditor issue) arises in your own name alone, and has to be handled under your name. This is what the Power of Attorney addresses by appointing an agent to act in your name, even outside the scope of the Trust. 

Some people also wish to delegate their authority to a trusted family member or friend while they are still competent so they can take that responsibility off themselves. For example, as we get older and we no longer wish to handle our finances or investments, we may wish to allow our children to help handle the day-to-day management of these things. With a non-springing Power of Attorney, you can provide someone you trust with the ability to deal with agencies, banks, or other entities, which would only allow you to handle matters personally.