Powers of Attorney are an essential element in estate planning. When people try to DIY their estate plan, they settle for generic papers that do not specifically address critical pieces such as updated and thorough powers of attorney. Do you know what an attorney in fact means? Why is a financial power of attorney important in your estate plan? Why should an individual or couple talk to an attorney at law about powers of attorney?
Defining Attorney in Fact
An attorney in fact is the person you name in your financial power of attorney to act on your behalf. Who can you name as your attorney in fact? You person must be an adult of “sound mind”, who is at “least 21 years or older.” Who should you choose to act on your behalf for money matters? Remember your attorney in fact acts in a fiduciary role. What does that mean?
A fiduciary is a person who follows three duties: care, loyalty, and confidentiality.
It's essential to choose a person who is trustworthy and able to handle financial assets on your behalf. .
What is a Financial Power of Attorney?
What is a financial power of attorney? A Financial Power of Attorney is a document that grants a person or organization (called the “attorney-in-fact”) the legal ability to manage the financial and legal affairs of someone else (called the “principal”). Basic financial power of attorney may allow a person to pay bills and handle minor financial matters. For single young adults, a Young Adult Plan (YAP) with simple financial powers may be enough. For seniors,a basic power of attorney may not provide enough protection. Why? Senior care issues and elder law bring different challenges that need specific solution. It's best to talk with an attorney to understand what documents a person needs. Indeed, it's best to ask a lawyer how to use a financial power of attorney.
The Importance of your Financial PoA
Why is a financial power of attorney important? The person named as an attorney in fact in a financial power of attorney may become the conservator. A conservator is a person approved by the Probate Division to handle the financial affairs of an incapacitated adult. Why does a young adult need protection? Often young people tend to live in a state of immortality. According to the Brain Injury Association of America, young adults between 18-19 years old are in the group for highest risk of a brain injury. Young adults are not immune from accidents or injuries causing permanent disability. If something happens, who will step up for that young adult?
It is vital to name an attorney in fact. Once a child turns eighteen (18) years old, he or she is an adult. Parents do not have the automatic right to speak or act on behalf of the young adult. Spouses do not have an automatic legal right to oversee the finances of an incapacitated spouse. Seniors need to have an added layer of protection to manage their affairs and protect themselves against financial exploitation.
Conservatorship and Financial Power of Attorney
What role does a named attorney in fact play in a financial power of attorney? When does Conservatorship happen? According to .” MO Rev. Stat. 475.030 Letters of guardianship and conservatorship issued, when (Missouri Revised Statutes (2023 Edition))”Letters of conservatorship of the estate may be granted for any person adjudged to be disabled. How does your financial power of attorney guide the court's decision? How is a Conservator appointed?
Conservatorship Priority Choices
There is a priority of conservatorship appointment set out in MO Rev. State “475.050 Appointment of guardian or conservator of disabled or incapacitated persons – order of priority.
- If an incapacitated person is able to verbalize a choice, then that person is considered.
- The next priority is a person named in writing, such as a power of attorney.
- “The spouse, parents, adult children, adult brothers and sisters and other close adult relatives.”
- A person named in a deceased persons will to act as a conservator.
- The Court appointed person.
The person named in your power of attorney is one of the first on the list to become your conservator upon incapacitation. If you're hit in a car and become incapacitated, your power of attorney is crucial. It's important to choose a person you trust, who is willing to act in a fiduciary capacity, and is comfortable working with your finances.
Your Estate Planning Attorney
What type of plan suits you? If you are single and between 18 to mid 20's consider a YAP. Married couple and parents need to seriously consider getting an estate plan in place. Are you a Senior wondering what type of estate plan you need? If you're ready to start working toward your estate planning goals, this is the time to call Your Estate Ally attorneys at 314-998-4223 or 314-332-0011. You may also Book Now.