By Aric D. Burch
March 3, 2022
All one needs is a simple financial power of attorney … think again.
Wendell knew he needed a financial power of attorney document in order to ensure he named someone to manage his finances and take care of his farm if he was ever unable to do so on his own.
But Wendell was busy and didn’t want to take the time or spend the money to meet with an estate-planning attorney to discuss a power of attorney. So he went online and printed off a basic power-of-attorney document, signed it and called it a day. Little did he know that his attempt to save some time and money would end up costing him many times more in the future.
Wendall’s document for financial power of attorney did name someone to make his financial decisions (his “Agent”). It was also a “durable” financial power of attorney, which means it would remain effective even if he later become incapacitated. Wendell even made sure he initialed all of the powers listed in the power of attorney in order to give his Agent plenty of authority to help manage his affairs and maintain his farming operation.
What Wendall didn’t realize is forms for financial power of attorney that are found online typically don’t contain sophisticated or unique provisions that may be necessary to truly give an Agent the power to properly manage a farm or protect assets. The standard power of attorney form may not fully authorize an Agent to care for a person or carry out that person’s overall estate plan.
For example, Wendell is concerned about paying for his long-term care, such as a nursing home, but his standard financial power of attorney lacks provisions that would allow his Agent to apply for medical assistance, create trusts to protect the farm or other assets, enter into contracts for his care, or authorize the Agent to make large gifts that are often necessary when dealing with nursing home planning. All of those provisions are vital when trying to preserve and protect assets like Wendell’s farm.
When Wendell eventually went into a nursing home, his Agent realized that medical assistance planning would be necessary to slow the drain on Wendell’s assets the monthly nursing home bill was creating. But Wendell’s Agent was surprised to learn that the standard power of attorney Wendell found online was not up to the task. The Agent was unable to carry out many of the steps needed to provide options for Wendell’s care. Ultimately, the Agent had to find other legal avenues to help Wendell (such as guardianship), which resulted in additional legal fees that could have been avoided with an adequate financial power of attorney. In addition, the delay in obtaining medical assistance for Wendell resulted in Wendell continuing to fully pay for several additional months of his nursing home care, which also could have been avoided with an adequate financial power of attorney.
Take the time Wendell didn’t. Be sure to have an adequate financial power of attorney document as part of your well-crafted estate plan. Consult with an experienced estate planning attorney to ensure an Agent will have all of the tools needed to help you when needed.
© 2022 Agri-View. Madison, WI. Reprinted with permission.
The content in the following blog posts is based upon the state of the law at the time of its original publication. As legal developments change quickly, the content in these blog posts may not remain accurate as laws change over time. None of the information contained in these publications is intended as legal advice or opinion relative to specific matters, facts, situations, or issues. You should not act upon the information in these blog posts without discussing your specific situation with legal counsel.
© 2022 Ruder Ware, L.L.S.C. Accurate reproduction with acknowledgment granted. All rights reserved.