Financial Power of Attorney
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Financial Power of Attorney – Transcript
In episode three eighty we talk about financial power of attorney. Stick around.
We talk about estate planning often with clients. There are three essential documents needed in your estate plan.
These three are just the basics. Everyone should have them.
The first is a will.
The second is an advanced health care directive.
The third is a financial power of attorney form.
Now regarding a will: if someone’s reading your will, you’re dead.
A will is how you want your assets handled after your death. It’s your desires.
But an advanced healthcare directive and a financial power of attorney are for you while you are still with us, while you are still alive. These are really important documents, but you need to know that financial planners and investment advisors can’t draft these documents for you. You’re going to need an attorney to do that.
A good attorney is going to draft all three of these documents at the same time for you. We have found that certain pockets of – some groups of individuals – usually have a will. But they won’t have an advanced health care directive or financial power of attorney.
And I’ll tell you who these people are. They usually fall into a couple of buckets:
People who were born in the 1940’s. Those people are now\… If you were born in the 1940’s in 2024, you’re age seventy five…or more.
If you were born in the 1950’s, you are now in your late sixties to early seventies.
Even someone who was born in the late sixties… Say you were born in 1969. In 2024, you’re fifty-five years old.
These are people who started families and then said “oh my goodness! We should have a will!”
And so they go out and get a will done. But they never got the will updated. Or they never got these other two documents the advanced healthcare directive or the financial power of attorney. And these people are now in their later years.
These are the people who need these documents the most!
Do you know someone like this?
You might be, it could be, a parent.
It could be you.
We also know people who say “gee, you know, that’s a good idea. I should really get that done. I’ll get to it next week.”
By the time you need a financial power of attorney, it might be too late. This is really important.
A financial power of attorney isn’t something that you scribble down on the back of an envelope while you’re sitting in the hospital parking lot.
First, you need to be competent to sign one of these forms.
Second, you need to have it drafted by an attorney.
And in many cases it needs to be notarized.
You may even need witnesses for this.
It’s not (again) not something you do on “the spur of the moment.”
And a lot of folks will also say, “well, if something happens to me, my kids will, the my kids will have to get involved. Or “my kids will handle it.”
And the way this normally unfolds – with many advisors and financial planners – is someone calls and they say, “I am so and so’s son or daughter, and we want to talk about mom’s account.”
First, a couple of things that should go off in a good advisor’s mind is:
First, we don’t know you. So we’re not talking to you.
Second, this could very well be a scam. It’s happening more and more.
Three, you could actually be in the hospital. But it might be for something minor – this could be a false alarm.
Four, this may not be your intention at all.
I think what a good adviser ought to do — a good financial planner ought to do — is call the client right away.
Make sure they’re on the same page. And that they have permission to discuss this. They should call the client immediately.
And verify that all of this is “on the up & up.”
Another scenario that happens is we’ll get a call from someone and they’ll say, “I’m Mr. Client’s son, or daughter. He is in the hospital. And it’s not looking too good. And we’re going to need money, because we have to pay some bills.”
We have a couple of suggestions.
While you’re still “with it,” introduce us.
Let us know what your plans are.
“Yes, my daughter Sally — she is going to be handling all of this stuff.”
Introduce us. It’s OK If we do it on the phone. It would be better to do it in person.
It would be OK to do it over a 3-way Zoom call. But introduce us, so we know who this person is.
Second, get us the actual document! Get us the financial power of attorney. That’s really critical.
Third, the next thing we need to prepare you for is the brokerage firm where the assets are. They are going to require their OWN documentation. And it’s not going to be a one-pager.
The current forms we’re using right now for a brokerage firm — they’re 19 pages. They’ve got to be signed by both parties, they’ve gotta be notarized. It’s (again), a little complicated and not something you can do, “spur the moment.”
One other suggestion that we have — whether we’re dealing with an estate, or we’re dealing with a financial power of attorney, and it is this.
One person. One person only, please.
It’s a problem when we have these conversations and they will go something like: “Well, that sounds good, but I need to talk to my brother.” Or “I need to talk to my sister!”
Or “my brother disagrees with this!” Or “we can’t agree on…”
Look. We’re all here to help mom. We’re all here to help dad. Let’s get it together.
Just have one point person please.
There’s a lot involved when it comes to things like estate planning and financial power of attorney.
That’s why we wanted to put this video together for you. In a future video we will talk more about the advanced healthcare directive and also your will.
But that’s the message today for episode three eighty. Thanks for tuning in!
