So I thought I would talk today a little bit about the purpose and goals of a power of attorney for financial affairs. It is a legal document that sits in and amongst with your other estate planning documents. Now, most people think of an estate plan as a will or a trust, and there are actually very important living documents that come along with a really good estate plan, and they actually protect you and or your assets at different times.
And today I’m going to talk about a power of attorney for financial affairs. So this is the document where you get to name somebody who can sign your name legally to legal documents. So we find them most often acting on behalf of somebody when they’re incapacitated. So you’ve had surgery, you fell at the beach and hit your head and you can’t be trusted because it’s a head injury. Or you are 85 years old in long-term care and you’re not quite competent to handle your financial affairs.
So the power of attorney is so important because it’s the document that says, before you became incapacitated, it says, I’ve named my spouse, my life partner, my sister, as the person who can interact with the financial world to go to the bank and pay my bills, to change my address at the United States Postal Service, because now they have moved me to an assisted living care facility is the document that allows your family or your chosen agent to go to your CPA and file your tax return. Now, most of them, of course, are online and CPAs send these electronically, but they still need your approval to send it electronically.
So if it’s April 14th and your taxes are just now complete, but you’re incapacitated or unable to talk to your CPA, the power of attorney is that document that allows the CPA with your agent to go ahead and authorize the transmission of your tax return to the IRS. Another place where we see them very critically used is talking to your broker or your financial representative when you’re unable to talk to them. And what that might be is you’re 75 years old and required minimum distribution is something that at the most of the time, most clients take them at the end of the year. You don’t have to always take them at the end of the year. You can take them any time during the year you want, but you’ve got to take this required amount out.
If you’re unable to make that conversation with the registered rep or your broker, then the power of attorney is something that’s super important to get to your registered rep or your broker or your HR department at the office. So if you are a participant in a 401k plan, file a power of attorney with your employee file so that if you’ve had that accident, you’re in a coma or you’re just super old and you don’t or can’t manage your affairs, the power of attorney says, pay attention to this person, family member, close relative, and let them interact, transact on my behalf. So if you’re in that coma, you’ve had the car accident, and we need to get at your 401k plan or your IRA to pay your bills, then the broker needs permission to talk to somebody. The beneficiary has no rights to talk to the broker and the broker – because of HIPAA laws – can’t talk to your beneficiary or your family. It’s only the participant, the person that owns the annuity or the person that owns the life insurance policy or the person that owns the IRA, IRA rollover or the participant of the 401k plan. These are your brokerage accounts at any big firm, Charles Schwab, Morgan Stanley, Merrill Lynch, all of those firms.
If you have a broker or representative, if you have an employee file at your company, if you have someone who’s helped you in the insurance world, apply and purchase an annuity or a life insurance policy, give them a copy of your power of attorney for financial affairs. If something happens to you and someone from the family is looking to help you manage the asset, access the funds, get those funds and trigger long-term care benefits, that’s what the power of attorney is for: Somebody can act in your stead when you can’t speak and or perform those financial transactions and decisions for yourself.
Power of attorney for financial affairs is good for as long as you since the day you sign it. So as long as it’s signed after 1993, it never has an automatic expiration date and it’s good till you change it.
Now I will warn you financial institutions, not crazy about these documents. They’d love to talk to you. They’re not crazy about talking to your assets through the power of attorney. And one of the places we find where they push back and they go, this is super old, is the date on the document. So my suggestion, best practice for you is if your power of attorney is older than five years old, go get that renewed. They’re not a super expensive document. This is not thousands of dollars, but do get that renewed.
You may actually have fallen out of love with the agent you put on there. Maybe you put your mom and she’s actually really no longer able to do those quirks. Maybe you’re doing that for her now. So make sure you keep that current.
One, have a under five year date on it. That would be perfect. And number two, have somebody in there that you continuously and regularly check in with yourself and say, yep, I still trust that person to transact for me financially. That’s what I have for you today.
Power of attorney, super important. Even for your 18-year-olds going off to college, get your 18-year-olds to sign one too. Now most of the time it’s their parents, it’s their mom or dad that they name as their agent. Why is that important? Because college kids oftentimes take out credit cards. They have social media presses, accounts. They have permission to use your credit card or a debit card in their name. This is why that power of attorney for financial affairs is so important. If they’ve been hit by a car, crossing the street, you need to manage their affairs, their accounts, their apartment rent. Somebody needs to actually help them until they get better and can manage on their own. Powers of Attorney for Financial Affairs. Go get that done right away.
Video Summary:
A Power of Attorney (POA) for Financial Affairs is a critical, often overlooked estate planning document that grants someone you trust the legal authority to act on your behalf if you become incapacitated. As Eileen Rice RICP® explains, this document allows your appointed agent to manage financial tasks such as paying bills, speaking with banks, updating addresses, filing tax returns, and accessing retirement or investment accounts. Without it, institutions like your CPA, financial advisor, or 401(k) administrator may be unable to speak to anyone—even family—due to privacy laws. Eileen emphasizes keeping your POA current (ideally updated every five years) and ensuring your chosen agent is still capable and trustworthy. She also highlights its importance for young adults heading to college, who often forget they are legally adults and need this document too. Bottom line: having a valid POA in place is a simple yet powerful step to protect your finances during life’s unexpected turns.
This material is intended for general public use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Tom is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Florida Veterinary Advisors and The Next Step Planning Group are not an affiliate or subsidiary of PAS or Guardian. California Insurance License #0K80141. AR Insurance License #15823672. Florida Veterinary Advisors is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. The individuals associated with Florida Veterinary Advisors do not maintain specialized licenses or qualifications for the financial services provided to veterinary professionals. 7989827.1 Exp 5/27