Just as you should update your wills and trusts to reflect new circumstances, make sure your financial POA is current, too.
While planning their estates, many physicians engage an attorney or estate planner to deliver a neatly bundled package of documents that usually includes a will, attendant trusts and various powers of attorney (POA).
Among these POAs is a financial one to establish how your financial affairs would be handled if you were to become physically or mentally incapacitated to the point where you couldn’t competently make these decisions yourself.
Many physicians assume their financial POAs assure that their financial affairs would be handled precisely according to their wishes. But all too often, these documents fail to achieve this goal because they’re often replete with boilerplate — broad statements designed to cover the needs of just about everyone and no one in particular. Most people, especially physicians with substantial assets, need more specificity. So off-the-shelf POAs need to be customized or ripped up so you can start over.
A common area of vulnerability created by the lack of specificity involves agents — the person or persons you designate to carry out the document’s provisions — who might go astray of your actual intent, even if this person is someone you love. Of course, as in all legal matters, what you actually intend isn’t clear if it isn’t included in the POA.
Unfortunately, these shortcomings typically aren’t noticed until it’s too late — until the person covered by the POA is incapacitated and unable to competently execute a revision. This can create a real mess for everyone involved.
To avoid this scenario, consider asking your attorney or estate planner these questions about your financial POA:
By asking these questions, you can start the ball rolling to make sure this document achieves what you intend and affords appropriate protections.
David Robinson, CFP®, is founder/CEO of RTS Private Wealth Management, an SEC-registered firm in Phoenix that provides fiduciary services to help clients achieve their financial goals. His practice focuses on helping wealthy individuals with custom financial plans, using a holistic approach to grow/protect wealth, manage taxes, identify insurance solutions, prepare for retirement and manage estate plans.