Financial Power Of Attorney

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peacefulmargin
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Financial Power Of Attorney

Post by peacefulmargin »

I am a 29 year old married guy with no kids. My wife and I have been getting organized with our finances and all other areas of our life. I was encouraged to get a financial power of attorney for my wife and I. We already have wills, living wills and medical powers of attorney but I just don't see where the financial one is necessary. Every account and asset is held jointly with the exception of our vehicles being in my name. What am I missing ?

Small $50k mortgage, almost mid six figure net-worth. If that makes a difference.

Thanks
mnvalue
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Re: Financial Power Of Attorney

Post by mnvalue »

I'm in a similar situation wondering the same thing. All I can say about it is that I've been surprised at the number of stories from people I know who had trouble transacting business by themselves on joint accounts. That's all fine when everyone is healthy, but what if one of you is incapacitated in the hospital? Would the power of attorney help? I don't know. Maybe. I will say that I've heard this recommended very strongly for military members. So obviously people think it's helpful in some cases. I look forward to hearing from others.
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damjam
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Re: Financial Power Of Attorney

Post by damjam »

mnvalue wrote: All I can say about it is that I've been surprised at the number of stories from people I know who had trouble transacting business by themselves on joint accounts.
Do tell. What kind of trouble have people had?
I just can't see where there would be an issue if the account is Joint Tenants with Right of Survivorship.

Edit to add: IRAs and 401ks can not be jointly held. If access to one or the other type of account were needed you would need a POA.
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arcticpineapplecorp.
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Re: Financial Power Of Attorney

Post by arcticpineapplecorp. »

I determine eligibility for Medicaid for people in long term care (know this might not seem relevant due to your age but I have worked with people who wound up in skilled care, even temporarily due to a vehicle accident, fell off a ladder, etc). The vehicles in both your name could be an issue: First, one vehicle is excluded but any others would be countable (depending upon their value, it "could" present a problem if over resource allowances for Medicaid). Secondly, your wife would be unable to sell the vehicles (or one if needed) if they are in your name (and she doesn't have financial power of attorney). She would have to get guardianship, but she would have to petition the court which is costly and time consuming (much easier to get the POA).

Furthermore, do you plan on starting an IRA or a 401K in the future? Those can not be owned jointly and could be a problem in the future since she could have to liquidate these resources in your name which would become part of countable resources if they are above a maximum protected share which would be determined at that time (fyi, only a community spouse's IRA/401K is protected from Medicaid).

I know these are not concerns to you right now, but I've dealt with enough couples who had resources that were not joint that became a problem for the spouse to access without the POA.

When you get the POAs make sure you get financial and medical power of attorneys as well (and living wills). This way she can make decisions for you (and vice versa) and other family members can not as easily intervene (as happens from time to time).
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Calm Man
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Re: Financial Power Of Attorney

Post by Calm Man »

Good grief. OP isn't looking to go onto Medicaid. Many people do not want to and wouldn't go on Medicaid.

OP, I don't think you need one at all. Frankly when it comes down to it, I have seen in "test drives" for my father for whom I am POA that banks won't take it as they want their own and a few brokerages were the same. I assume that with a lawyer and lawsuit you could enforce it. But with a wife and joint accounts, you are quite solid. And if you die and your will has your possession go to her, the cars will.,
Fallible
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Re: Financial Power Of Attorney

Post by Fallible »

passivestream wrote:I am a 29 year old married guy with no kids. My wife and I have been getting organized with our finances and all other areas of our life. I was encouraged to get a financial power of attorney for my wife and I. We already have wills, living wills and medical powers of attorney but I just don't see where the financial one is necessary. ..
Here are good reasons for a POA from nolo.com: http://www.nolo.com/legal-encyclopedia/ ... 30061.html
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
MN Finance
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Re: Financial Power Of Attorney

Post by MN Finance »

Other than an academically interesting question, there really shouldnt be much debate. Get it = no downside, dont get it = potential problem. Given that logic, theres no reason to carry any risk. We could all opine about a certian situation but its not even needed.
jimmy
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Re: Financial Power Of Attorney

Post by jimmy »

It probably wouldn't hurt to get one just in case. You can get a basic POA and do it yourself at legal zoom for a nominal cost.
mnvalue
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Re: Financial Power Of Attorney

Post by mnvalue »

damjam wrote:Do tell. What kind of trouble have people had?
I can't remember a lot of specifics. More-or-less it's banks requiring talking to or signatures from both spouses on fairly routine things. The only ones I remember specifically: A co-worker couldn't update his mailing address when they moved. My wife and I had to file separate travel notifications on our debit cards on a joint checking account. A cell phone company rep freaked out during a credit check when my wife had to ask me who holds our mortgage. If these sort of things are such a pain, what about more serious issues?
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Mrs.Feeley
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Re: Financial Power Of Attorney

Post by Mrs.Feeley »

There was an episode where my husband works in which a coworker suffered a major heart attack that left him on life-support. He was not expected to survive. Because his wife had POA, with the help of the H.R. dept. she was able to retire him on disability before he died. There was some H.R. technicality that if he was retired on disability when he died his family received greater pension benefits after he died than if he had died while employed. Because all this had to be arranged hastily before he died, and because it was over a weekend, it proved a godsend to the family that there was a copy of the POA handy. Had his wife had to hire a lawyer and go to court to get guardianship--well, sadly her husband would not have lived long enough for that. So yes, OP, do obtain POA for both you and your wife. You never know when it will come in handy.
umfundi
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Re: Financial Power Of Attorney

Post by umfundi »

I suggest you each have a POA designating the other to act on your behalf.

Then, check with the banks etc. as to what they would want if one of you becomes incapacitated. Is the POA sufficient?

Our POAs also designate a third person to act if we both are incapacitated.

If the accounts are held jointly, do they require both of you to act? For example, do checks require two signatures?

Keith
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peacefulmargin
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Re: Financial Power Of Attorney

Post by peacefulmargin »

Thanks for all of the replies.

I did misspeak about the "All assets" being held joint. I have a 401K and we both have Roth IRA's. I checked out legalzoom and it is cheap. Better to have it, than need it and not be prepared.

Thanks for the feedback.
umfundi
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Re: Financial Power Of Attorney

Post by umfundi »

passivestream wrote:Thanks for all of the replies.

I did misspeak about the "All assets" being held joint. I have a 401K and we both have Roth IRA's. I checked out legalzoom and it is cheap. Better to have it, than need it and not be prepared.

Thanks for the feedback.
For all the accounts, check that the beneficiaries are as they should be.

Keith
Déjà Vu is not a prediction
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damjam
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Re: Financial Power Of Attorney

Post by damjam »

passivestream wrote:Thanks for all of the replies.

I did misspeak about the "All assets" being held joint. I have a 401K and we both have Roth IRA's. I checked out legalzoom and it is cheap. Better to have it, than need it and not be prepared.

Thanks for the feedback.
As was mentioned above by Calm man, many banks/brokerages etc (if not all) will not accept a "generic" POA (or at least will make your life very difficult). You will have to contact those institutions that you have accounts with and find out their requirements. Each institution will probably have a stock POA that they want used.
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