Ted Hoyt, a board-certified tax law specialist, has been practicing law for over 40 years.
First: What is a power of attorney? A power of attorney is a document where I appoint someone as my agent to act on my behalf when I am unable to do so, for example, I could appoint my wife as my agent to sign paperwork for me.
Second: 50% of the people over 55 will be disabled for some period of time prior to the end of life, so it is critical that such a document being in place.
For example, most clients have a 401(k) and IRA. While my spouse is the beneficiary, if I die, she is not the beneficiary and has no access to the funds whatsoever as long as I’m alive. Without a valid Power of Attorney, she must go to court and file an expensive legal proceeding called an interdiction. This requires two lawyers. One, to represent my wife and the judge will appoint an attorney to represent me. Second, the court will order a doctor to examine me. Third, the court will order that a CPA report to the court what assets I own; and finally we will need an insurance man because my wife is required under the law to post a surety bond to cover the situation where she would misuse any of the funds that she was managing on my behalf.
We strongly recommend that everyone over 55 has a valid power of attorney. The power of attorney we do most the time is what we call a Springing Durable Power of Attorney which is one that only goes in effect when someone gets disabled.