“I have a Will and a Health Care Proxy. I Don’t Need a Power Of Attorney.” Yes you Do. A Power of Attorney is an essential document for your family’s financial and legal well-being. It is a giant key that can open up doors that are normally closed tight. When a loved one gets sick and is unable to handle their financial obligations then a Power of Attorney allows for a chosen individual to step in and safeguard that loved one’s financial well-being. A serious illness can last for years. Not having a power of attorney could mean the loss of family assets and the severe devaluation of property.
If a loved one is compromised or seriously ill then just obtaining a signature can be next to impossible. A Power of Attorney cuts through all of that waste. If you have been appointed as an Agent under a New York Power of Attorney you can handle real estate transactions, banking, business, insurance, claims, benefits, tax matters and any other similar transaction. If the executed Power of Attorney includes the Statutory Gift Rider then you may be able to transfer funds or create trusts to help your loved one apply for Medicaid or other special benefits.
Without a Power of Attorney in place, the legal options for gaining financial authority over a disabled individual involves petitioning for an Article 81 Guardianship in New York which can be time consuming, expensive and complicated.
Adding someone’s name to an account does give that person access, but it also creates income tax implications and can affect financial aid applications. An agent under a Power of Attorney is a fiduciary who does not become individually impacted but stands in the place of the disabled individual and acts in their best interest.
The New York State Statutory Power of Attorney form that we regularly draft is only one type of power of attorney. Most banks and financial institutions have their own Power of Attorney forms that correlate with accounts associated with that institution. Even with an executed New York Power of Attorney, we recommend that a bank’s power of attorney be executed as well to avoid any issues down the road. Agencies of the Federal Government including the IRS (Form2848) have their own Powers of Attorney as well.
The goal is to choose a trusted family member or friend to be an agent under a Power of Attorney so that your financial well-being is not compromised during a health crisis.