Gathering facts, numbers, documents, and names together to establish or edit estate planning documents is a lot of work and a serious undertaking. It helps to have the support of your financial advisor to guide you in getting these materials just right, especially when it comes to the financial aspects of your power of attorney.
Do You Pay an Agent Operating Under Your Power of Attorney?
Power of attorney is designed to give a designated person the ability to act on your behalf. They might be authorized to manage business decisions, medical matters, financial issues, or other private matters. Some of these issues are large, time-consuming, and life-altering, which begs the question: Should you pay an agent acting under your power of attorney? Here are some financial elements to consider:
- Establishing compensation: Compensation, in this case, is payment for services rendered and treated as taxable income.
- How much compensation: One way to assign a dollar figure to the role of agent is to estimate the cost of hiring professionals to carry out the instructions of your power of attorney.
- No compensation: Family members often do the tasks assigned to them in a power of attorney without charge.
Your financial advisor will encourage you to seek advice from your attorney to ensure that all established financial matters are done within the limits of your power of attorney.
Do You Need a Financial Power of Attorney?
Through all this information about power of attorney, it is important to recognize that a basic power of attorney is different from a financial power of attorney. The financial power of attorney is a legal document that grants someone the authority to manage financial matters on your behalf and only financial matters. For example, you may name someone to make decisions for your business if you’re undergoing surgery and recovery, fall ill, take an extended trip out of the country, or become incapacitated or cognitively impaired.
You can have both a power of attorney and a financial power of attorney as part of your estate planning documents, though your general power of attorney can speak to financial matters within your estate plan. A financial expert can help you determine which documentation might be most beneficial based on your wealth and financial planning choices.
Are You Ready to Financially Safeguard Your Present and Future?
Anyone authorized to make decisions for you must be a trusted person, often a family member, but certainly an entity who thinks as you do and who you believe will make choices as you would and honor your wishes as identified in your power of attorney. With support from your financial advisor at Hollander Lone Maxbauer in Southfield, MI, you can feel good about the decisions you make about your financial present and future and all your estate planning documents. Contact us to schedule a consultation.
