Dangers of an Outdated Power of Attorney
Having an updated Power Of Attorney (POA) is a vitally important component of estate planning. It is a common mistake for individuals to let their initial POA paperwork expire or become outdated, which can negatively affect the distribution of their inheritance. At Phelps LaClair, located in Scottsdale and Gilbert Arizona, we want to help you make certain your living will and living trust are current and strategic.
What is a Power Of Attorney?
When setting yourself up for the future, establishing a responsible power of attorney is crucial. The Power Of Attorney is the person to whom you have assigned authority in make decisions for your legal, medical, or financial matters, upon your incapacitation or death. There are two types of Power Of Attorney: a durable power of attorney for health care, and a durable financial power of attorney. There can be two individuals to carry out these separate functions, or both POA responsibilities can be assigned to one individual. It’s simply a matter of your preference.
Depending on how your POA is set up, the individual named as POA can have access to your bank accounts, can file your taxes, and may even change the beneficiaries of your estate. The person executing this role will determine how well your assets are distributed and how well your wishes are followed, two reasons it’s so vitally important to be sure your POA paperwork is current.
With laws continually changing, the terms under which you set up your initial Power Of Attorney can become outdated or even expire, if an expiration date has been included as part of your original documents. It is valuable to review your POA regularly and keep it updated to avoid the following issues:
- If laws change, your POA may still be valid, but not interpreted as you would have hoped—with the possible result that your specific wishes will not be carried out as originally stated.
- Banks and other institutions may not allow your POA instructions regarding financial decisions if the paperwork isn’t current.
- Only fifteen states currently accept out-of-state POA forms. If you move and don’t update your address, all of your planning may be invalidated.
- Changes with HIPAA may not be reflected in outdated POA forms and could interfere with making essential medical decisions.
Time constraints, costs, and frustrations may arise with an outdated Power Of Attorney. To avoid problems and make sure you have an updated POA in place, contact Phelps LaClair today. We’re here to help ensure that all your estate planning is done right, and done at the right time.
Images used under creative commons license – commercial use (12/12/2017) ThoroughlyReviewed (Flickr)