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Steven J. Hudgins
First Vice President/ Investments
CA Insurance Lic. #0B32062
Julia C. Anderson
Senior Registered Client Service Associate
Stifel, Nicolaus & Company, Incorporated
1420 Rocky Ridge Drive, Suite 340
Roseville, CA 95661
Phone: (916) 774-3706
TollFree: (866) 498-6682
Fax: (916) 626-3313
Email: steven.hudgins@stifel.com
July/August 2023
Estate Planning Basics: Financial Power of Attorney
You probably know that your most important estate planning document is your will. Your will specifies how you want your property distributed after your death and names a guardian for any minor children you have. But there are other documents you should consider in your estate planning, including a financial power of attorney.
What Is It?
A financial power of attorney gives a person you name — your agent — the power to make financial decisions for you. It’s typically used if you become incapacitated and can’t make these decisions for yourself. You generally have two options for when a power of attorney will take effect.- Immediately. Your agent, often your spouse, can act on your behalf in financial matters even if you’re not incapacitated. This may be an option if you’re not always available to conduct financial transactions due to travel or other events that take you away from home.
- Tied to an event. Your agent can act only after a triggering event, such as becoming incapacitated and/or unable to communicate. Generally, one or more doctors must certify that you’re physically or mentally unable to make decisions for yourself. A durable power of attorney generally remains in effect for the duration of your incapacity.
Establishing Limits
You can give your agent unlimited authority over your finances or to confine the agent’s powers to specific tasks. Some tasks an agent can perform include investing, selling assets, collecting retirement benefits, paying bills, operating a business, logging into financial accounts, managing real estate, and buying insurance.Naming an Agent
The person you designate must be over age 18, and the document must be signed in front of a notary. Many financial institutions require their own forms. Typically, a power of attorney ends when you die; you revoke the PoA; a court rules it invalid; or the agent is unable to fulfill the duties.Make sure you avoid these common errors when designating a power of attorney: failing to name a successor agent, granting powers that are too broad, and failing to notify a prior agent if you appoint a new PoA.
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