Crafting a Powerful Financial Power of Attorney in PA
Once you’ve decided to establish an estate plan, you most often spend much of your time planning your legacy gifts and designing a Will or a Revocable Trust (aka Living Trust). But Estate planning must include other documents such as a financial power of attorney (FPOA). With a financial power of attorney, you nominate your trusted representative as your agent to handle administrative and major financial matters. There is no such thing as a standard FPOA in PA. Rather, drafting a FPOA must be done correctly, or it will not be useful when needed at a time when you are vulnerable and not able to manage your financial affairs. You should always have an experienced Media, PA West Chester, PA CELA assist you in ensuring your FPOA will authorize your carefully selected agent with the carefully considered scope of authority that allows your planning that you would do if only you could.
How do you obtain a durable FPOA? Well it’s almost impossible to find a FPOA that is NOT a durable FPOA. In Pennsylvania, powers of attorney are presumed durable unless otherwise stated. This is typical of most states. With a durable document, it means that the authority of the agent continues even if you as the principal lose capacity. In other words, the document endures the incapacity of the principal. Many many years ago, FPOA’s were not presumed to be durable. But, that’s not the case now!
Why You Should Create a Financial Power of Attorney
We know you may not live forever, but you might not die quickly. During a chronic or sudden illness, it is important that your financial affairs continue without interruption. By including a FPOA in your estate plan, you have better control over your future. You decide who you want to authorize to act on your behalf if you are injured in an accident or become severely ill. You also have the power to assign what authority and powers the agent will have. That can help reduce the potential for disputes between family members. You can relax knowing that your trusted representative will meet your family’s needs during the time you are disabled or incapacitated.
You are likely wondering what happens when you don’t have a power of attorney in place. Instead, the court will have to appoint a guardian to handle your affairs. The person chosen by the court is not necessarily going to be the person you would have picked. And, their powers will vary, depending on what the court decides to award them. These powers could also differ significantly from what you would have granted. Avoid putting yourself and your family through the court-appointed guardian process by creating your power of attorney ahead of time.
How to Craft a FPOA that Protects You and Your Money
When you meet with your attorney to discuss the elements of your estate plan, the discussion of whether to sign a FPOA often includes the dealing directly with the tension between sharing control with an agent versus maintaining control even at the risk of a guardianship. But, done properly, a well crafted FPOA can include provisions that relate to selection of agents in cases of blended families so that tax planning and asset protection can still occur if you become incapacitated without jeopardizing your estate plan. It is important for you to understand that Pennsylvania law has various “Hot Powers” or statutory provisions that relate to the types of agent actions that relate to maintaining or adjusting a principal’s estate plan. When you take the time to prepare your FPOA, you are able to carefully craft the limits of any adjustments that may be made. Additionally, FPOA’s appoint agents that are often challenged by other siblings or family members who may wish to have access to confidential information. You, as the principal, can anticipate these family dynamics and include provisions that proactively resolve these issues. Just image, you can have a FPOA that actually protects you, your assets and your estate plan.
Is it Time to Update Your Financial Power of Attorney?
If you have an existing power of attorney drafted before January 1, 2015, you should consider updating your FPOA now! Act 95 went into effect at the start of 2015. FPOA executed prior to that date remain legally valid. But, as your existing FPOA become “stale” it is much more likely that third parties, like banks will question or refuse to accept the FPOA. Interestingly enough, Act 95 provides complete immunity to these third parties if they were to rely on a FPOA, but ACT 95 does permit then to require documentation and other processes prior to acceptance. This can result in tedious delays.
Contact a Pennsylvania Certified Elder Law Attorney Today
If you need assistance with a financial power of attorney in Pennsylvania, let our Media, PA West Chester, PA CELA estate planning attorneys assist you.
Contact Anderson Elder Law by calling 610-566-4700 or emailing us at firstname.lastname@example.org. We can’t wait to hear from you!