What can a person who has Power of Attorney do?

 As we get older many of us may consider getting someone, we trust to help us look after our financial affairs. In BC this is done through an Enduring Power of Attorney, in other jurisdictions, there are other names and requirements.

When you give someone your Power of Attorney make sure it is someone you would trust to step in for you if you cannot manage your money down the road. They might be your spouse, adult child, grandchild, nephew or niece, a long-time friend, or someone else you really trust.

An Enduring power of attorney is a document in which an adult authorizes another person (called their attorney) to make decisions in relation to your financial affairs, business, and property. The person (attorney) is authorized to act when you become incapable, or to continue to act while you remain incapable. Attorneys may not make health care treatment decisions. A Power of Attorney is drawn up by a lawyer, both to protect your rights and to protect the attorney’s rights.

A person who has your Power of attorney can act on your behalf in the following four areas. These areas are the most common, but the attorney can act in any other financial areas that you define in the legal agreement. If you are considering giving someone the Power of Attorney over you, check with a lawyer before you do this.

1. Manage daily finances

2. Manage investments and sources of retirement income

3. Manage your home and other property

Let’s go over these categories in more detail.

1 MANAGE DAILY FINANCES

•        Make sure your bills are paid on time. This includes mortgage, rent, credit cards, insurance premiums, and basic services such as utilities and subscriptions (cell phone, TV, newspapers, etc.). They can also set up automated bill payments.

•        Monitor your checking and credit card accounts, including making sure automatic payments are appropriate.

•        Look for unusual purchases, donations to charity, and payments that may signal that someone is stealing money from your account or that you are being targeted by a scam.

•        Make sure your tax forms are filed correctly and on time, such as income taxes and property taxes.

•        Hire and monitor professionals like tax preparers, financial advisers, and attorneys.

•        Securely store your passwords, financial records, bills, checkbooks, credit cards, tax returns, and other important documents.

•        If needed, pay home health aides and other care providers.

The goal here is to make sure all your expenses are accounted for and that your bills are paid on time, thereby avoiding late fees, penalties, and loss of service or coverage due to missed payments. This helpful monitoring will also protect you from inappropriate purchases and repairs, overzealous solicitors for charitable causes, and many forms of scams, fraud, and identity theft.

2. MANAGE INVESTMENTS AND SOURCES OF RETIREMENT INCOME

To keep you financially secure, your attorney might help with the following tasks:

•        Determine if you’re eligible for financial support or other government programs.

•        Initiate pension payments and appropriate withdrawals from retirement accounts

•        Periodically monitor and evaluate your investments and insurance to make sure they are still appropriate for your situation and meet your goals.

•        Review that your income from retirement accounts is properly transferred into checking and savings accounts.

•        Work with you to develop and manage sources of retirement income and an investment strategy. If needed, your attorney can help find the appropriate financial professional.

Ultimately, your attorney will keep your retirement savings safe by making sure you aren’t sold investments and insurance products that are inappropriate for your circumstances and goals. They can also prevent high charges for professional services from brokers and advisers, and potentially catastrophic losses due to fraud or mistakes. Last, they can make sure you receive public assistance if you meet eligibility requirements.

3. MANAGE YOUR HOME AND OTHER PROPERTY

If you own your home, your attorney can:

•        Work with you to identify what repairs and maintenance are needed.

•        Screen, hire, and monitor work done by service providers like contractors, housekeepers, exterminators, plumbers, electricians, and other repair people.

If you own rental properties, your attorney can:

•        Hire people for maintenance and repairs.

•        Collect and deposit rental payments.

•        Communicate with current tenants.

•        Interview and evaluate prospective tenants.

If your attorney is not comfortable with this role or lives far away, you or your attorney can investigate hiring a professional property manager for rental properties. The goal here is to prevent substantial costs due to neglected repairs and untrustworthy helpers.

In the case of rental properties, you want to avoid losing income due to turnover with tenants and other issues that can come up.

IT’S A PRETTY BIG ROLE

It’s quite remarkable how many tasks you do to manage your money and keep it safe. Your attorney might also spend a lot of time with these tasks. Be sure to thank them for their time!