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Do You Need a Financial Power of Attorney?
If You Own Joint Tenancy Property
Joint tenancy is a way that more than one person can own property together. When one owner dies, the other owners automatically inherit the deceased person's share of the property.
But if you become incapacitated, the other joint tenant owners have very limited authority over your share of the joint tenancy property. For example, if you and someone else own a bank account in joint tenancy and one of you becomes incapacitated, the other owner is legally entitled to use the funds. The healthy joint tenant can take care of the financial needs of the incapacitated person simply by paying bills from the joint account. But the other account owner has no legal right to endorse checks made out to the incapacitated person. In practice, it might be possible to get an incapacitated person's checks into a joint account by stamping them "For Deposit Only," but that's not the easiest way to handle things.
Matters get even more complicated with other kinds of joint tenancy property. Real estate is a good example. If one owner becomes incapacitated, the other has no legal authority to sell or refinance the incapacitated owner's share. By contrast, with a durable power of attorney, you can give your agent authority over your share of joint tenancy property, including real estate and bank accounts.
When You Shouldn't Rely on a Durable Power of Attorney
The expense and intrusion of a conservatorship or guardianship are rarely desirable. In a few situations, however, special concerns justify the process.
You Want Court Supervision of Your Finances
If you can't think of someone you trust enough to appoint as your agent, with broad authority over your property and finances, don't create a durable power of attorney. A conservatorship or guardianship, with the built-in safeguard of court supervision, may be worth the extra cost and trouble.
You Fear Family Fights
A durable power of attorney is a readily accepted and powerful legal document. Once you've finalized yours, anyone who wants to challenge your plans for financial management will face an uphill battle in court. But if you expect that family members will challenge your document or make continual trouble for your agent, a conservatorship or guardianship may be preferable. Your relatives may still fight, but at least the court will be there to keep an eye on your welfare and your property.
FAQs
- How can I find a lawyer to help me plan my estate and write any necessary documents?
- Why should I go to the trouble of planning my estate and writing a will?
- Why can't I just use a book, or one of those computerized "will kits" I've seen in bookstores and do it myself?
- Isn't a will all I need?
- If I use a lawyer, how much should I expect to pay?
Estate Planning Resources
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