If one or both of your parents become incapacitated or may become so in the future, to the point that they aren’t able to make crucial financial decisions, whether it be preparing and signing their tax returns, paying their bills, or making sound decisions on investments or savings, it would be a good idea for them to draw up power of attorney agreements granting authority to a third party such as one of their children, or another family member, to make financial decisions or transactions in their behalf.
The Wall Street Journal’s Market Watch states that a power of attorney can cover all financial matters, or it can be specific, providing authority to handle for example, only investment accounts, or only covering their day to day financial matters such as paying bills, or using money from their bank account with a specific limit. A Massachusetts elder law attorney drafts durable power of attorney agreements specific to the state of Massachusetts, and in a way that dignifies both parents and children.
Corporate and Government financial Information advisors Financial Finesse outlines several scenarios in which parents might want to give power of attorney to their children.
1. If a parent is mentally competent presently but needs help with day to day financial activities, or in dealing with specific banks or other financial institutions. This limited, narrow power of attorney provides needed help and perhaps an added measure of peace of mind to the mentally competent parent.
2. If a parent is single or if the parent’s spouse is not mentally competent to exercise power of attorney, then it would be wise to have another person who has power of attorney on record in the event of an unexpected situation where the parent is not able to handle their financial matters.
3. A specific durable power of attorney can be prepared covering a specific period of time during which a parent might be temporarily unable to care for their financial matters or specific financial matters.
The Wall Street Journal notes that most law firms can assist clients with the necessary paperwork and that it is necessary to have forms notarized. After notarizing the documents, it would be wise to give copies to all parties including financial advisers or institutions and your attorney, and/or your parents attorney.
While some simple forms may be generic, each state generally has their own power of attorney forms. In Massachusetts one such form is the M-2848 from the Massachusetts Department of Revenue. A competent and compassionate Massachusetts estate planning lawyer will provide needed assistance covering all aspects of a power of attorney between children and parents in a manner that is equitable, legal, and that ensures the greatest security.