Why Do I Need a Financial Power of Attorney? - Ask The Attorney
Q: Every time I go to the doctor, they ask me if I have a health care power of attorney. I understand why that’s important, but now I’m hearing that I also need a financial power of attorney (financial POA). My family member is joint on everything, so why do I need one?
A: The short answer is, you need a financial POA in the event that you become unable to manage your own finances. Even though you may think you have everything “taken care of” through joint ownership, it isn’t that simple. For example, you cannot own most tax-deferred assets, such as IRAs, jointly. A beneficiary designation doesn’t give power to your beneficiary during your life. A financial POA, when done properly, also enables a person you trust to apply for important health care benefits (if you need them) and it enables them to preserve your money in times of crisis. Without proper planning, your loved ones will need to go to court in a process called conservatorship.
Read more about Powers of Attorney and Beneficary Designations.
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This blog post and answer is not legal advice. It is for informational purposes only. For legal advice on your specific situation, consult with a qualified elder law attorney.
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