Common Reasons People Tend to Think They Don’t Need Financial Power of Attorney
A power of attorney for finances can be an extremely useful estate planning tool. However, many people mistakenly believe they do not actually need it.
Below we review some of the most common reasons people tend to think they don’t need a financial power of attorney — and why they are likely to be wrong.
If you are married, your spouse does have some authority over the property you own together. For example, he or she will be able to pay off bills from a joint checking account or sell stock in a brokerage account you own together.
However, there are still limits on your spouse’s ability to sell property you jointly own. Both must consent to the sale of jointly owned cars or real estate. If you are incapacitated, you cannot legally consent, meaning your spouse cannot sell off valuable property to help pay for your care unless he or she goes to court to request a guardianship. You can grant your spouse (or another person) financial power of attorney to avoid this headache.
You have a living trust
A living trust is an important estate planning tool, but it does not serve as a substitute for financial power of attorney. The successor trustee in a living trust does not have any authority over property not held in the trust. Because you are unlikely to have all your property in a trust, you must designate financial power of attorney to ensure your property can be properly managed during your incapacitation.
You own property in joint tenancy
When one owner of property held in joint tenancy dies, the other owner(s) inherit the deceased owner’s share. However, if you are incapacitated, your share is not passed on to other owners. You are still the legal owner of that property, and there are plenty of complications that can arise from that.
These are just a few reasons why it’s so important to cover your financial bases via financial power of attorney. For more information, speak with a knowledgeable Tampa estate planning lawyer at BaumannKangas Estate Law.