Like Downton Abbey, all good things must come to an end. This week, we will be concluding our estate plan series with the help of a sub-contractor. Most of us hire sub-contractors to build a home because we are unable to carry out the tasks on our own. Similarly, a power of attorney for financial matters – the last piece of a basic estate plan – allows you to authorize someone else to make financial decisions if you are unable to do so.
While the successor trustee of your trust will be able to handle a good portion of financial matters, some actions, such as signing tax returns or transacting on retirement accounts, require specific appointment. Among other things, your appointed “attorney in fact” may be appointed to pay your everyday expenses, watch over your investments, file your taxes or collect retirement plan or insurance benefits.
It is important to update your power of attorney document periodically to ensure that no one is left doubting that it is the most current version. Some financial institutions will not honor documents that are older than ten years. Also, just like other key players in your estate plan, it’s important to ask those that you would like to serve if they are willing to take on the responsibility and provide them with copies of your most recent documents.