Understanding Financial Powers of Attorney

New York State Estate Planning Attorney - Law Office of Andrew M. Lamkin, P.C.Good estate planning involves more than just preparing a will. It not only involves planning for the dispersal and finalization of your estate after you die, it also involves the following:

  • Avoiding probate disputes,
  • Reducing estate taxes,
  • Planning for your needs if you become unable to care for yourself,
  • Protecting your estate from unforeseen creditors, and
  • Providing for the protection for those who will inherit your estate.

A financial power of attorney (also called a durable power of attorney) enables you to give someone else the authority to make financial decisions for you, in the event that you become unable to manage your finances yourself. The person to whom you give this authority will be called your agent and is usually an attorney or a family member whom you trust to make financial decisions on your behalf.

Your agent will take care of routine tasks, such as checking your mail and paying your bills, as well as more complex tasks, such as managing your retirement account and filing your taxes. He or she does not have to be a financial expert, but rather someone who is trustworthy and has common sense. Whenever necessary, your agent can hire other professionals to handle tasks that he or she is not capable of handling.

A financial power of attorney can be drafted to take effect immediately or when you become incapacitated. Spouses often have active durable powers of attorney that authorize each spouse to handle the financial tasks of the other whenever they out of town or otherwise unavailable to do so. Others draft powers of attorney that will be activated only when a doctor certifies, in writing, that they have become incapacitated.

In New York, a durable power attorney must specify the following:

  • The powers you are granting,
  • That these power will exist even after you become disabled or incompetent,
  • To whom you grant these powers,
  • The specific financial transactions you grant your agent the authority to manage, and
  • That this power of attorney may be revoked by you at any time.

The State of New York has its own durable power of attorney form that is readily available on the internet. However, it is not mandatory to use the state’s form. In fact, some banks and financial institutions have their own forms for granting someone authority to manage another’s accounts.

In any event, your durable power of attorney must be signed in front of a notary public (or two witnesses) and with your selected agent present. Once you have completed and properly signed the form, your power of attorney will be valid until your death. This means that you cannot use a durable power of attorney to grant someone the authority to handle financial matters after your death. This authority must be granted to the person in your will by naming he or she as the executor of your estate. That person will then have the authority to handle specific matters, such as paying off debts, distributing property to beneficiaries, and arranging the funeral and burial.

The Law Office of Andrew M. Lamkin, P.C. – Estate Planning Attorney

It’s important to have an experienced lawyer working with you when establishing power of attorney. We can help you develop a plan for how your finances and healthcare will be handled if an accident, illness, or medical condition renders you incapable of making these crucial decisions yourself. Call the Law Office of Andrew M. Lamkin, P.C. at 516-605-0625 or contact us here for a consultation.

Like us on facebook