Posts tagged: power of attorney

While meeting with clients, as a Calabasas estate planning lawyer, I often hear this question: “Should I add my family member to my accounts as a joint owner, or set up a Power of Attorney?” While adding a joint owner might seem like the simpler solution, the answer isn’t as straightforward as you might think.

When Joint Accounts Create More Problems Than Solutions

Picture this scenario: Your spouse is in the hospital, and you need to make urgent changes to what you thought was a fully accessible joint investment account. Despite being a joint owner, you hear these frustrating words: “I’m sorry, but we need authorization from both account holders to proceed.” Without a Power of Attorney (POA), you could find yourself powerless at a crucial moment.

Understanding Your Options

Let’s explore why a Power of Attorney often proves to be the better choice for most families. A well-drafted Power of Attorney offers several key advantages:

• Provides clear legal authority for your chosen representative
• Maintains your control while creating a reliable backup plan
• Generally works smoothly with financial institutions
• Can be tailored to your specific needs and circumstances

The Hidden Complications of Joint Accounts

While joint accounts might seem convenient, they often come with unexpected challenges. For example, joint ownership can affect your government benefits and create tax complications you never anticipated. Perhaps most concerning, joint accounts might unintentionally disrupt your carefully planned estate distribution, leading to family conflicts that could have been avoided.

Making the Right Choice for Your Family

As your Calabasas estate planning lawyer, I recommend considering these factors when making your decision:

1. Control: A POA lets you maintain full control of your assets while providing a backup plan
2. Flexibility: Your POA can be customized to fit your specific situation
3. Protection: Unlike joint accounts, a POA doesn’t put your assets at risk from others’ creditors
4. Family harmony: POAs often help prevent unintended inheritance issues and family conflicts

The Bottom Line

While joint accounts have their place in some situations, a Power of Attorney provides the most reliable and flexible solution for ensuring your finances can be managed when you need help. It offers protection without requiring you to give up control of your assets.

Ready to explore which option best fits your situation? Call our office at 818-334-2805 to schedule a consultation. We’ll help you understand your choices and create a plan that provides both security and peace of mind.

As a Calabasas estate planning lawyer, I often find that people associate powers of attorney only with end-of-life planning. However, limited powers of attorney (POAs) can be incredibly useful tools for managing specific tasks in your day-to-day life. Think of them as delegating authority for a particular purpose, rather than handing over complete control of your affairs.

What Makes a Limited Power of Attorney Different?

Unlike a general power of attorney that grants broad authority, a limited POA gives someone specific powers for a particular purpose or time period. It’s like giving someone a spare key to one room in your house instead of a master key to the whole building.

Common Situations Where Limited POAs Help

Real estate transactions often benefit from limited POAs, especially when you can’t attend a closing in person. This is particularly useful for military personnel stationed overseas or people relocating for work. Business owners frequently use them to authorize specific transactions or manage particular vendor relationships when they’re unavailable.

Financial management is another common use. Whether you need someone to handle a specific investment account while you’re traveling or manage particular insurance claims, a limited POA can grant just enough authority for the task at hand without giving up control of your entire financial life.

The Importance of Proper Drafting

As a Calabasas estate planning lawyer, I can’t stress enough the importance of having these documents properly drafted. A well-crafted limited POA should clearly define the scope of authority, specify any time limitations, and comply with state laws. Most importantly, it needs to be recognized by the institutions where it will be used.

The beauty of a limited POA lies in its restrictions. You can set specific start and end dates, define exact powers granted, and maintain control over all other aspects of your affairs. This makes it a flexible tool for managing specific needs while protecting your broader interests.

Planning for Now and Later

While limited POAs serve immediate needs, they’re just one tool in the estate planning toolkit. It’s equally important to have a general durable power of attorney in place for potential future incapacity. This broader document ensures someone can manage your affairs if you become unable to do so.

Whether you need a limited POA for a specific task or want to ensure comprehensive coverage for the future, our law firm can help. We can draft documents tailored to your current needs while also helping ensure you have a general power of attorney in place should you become incapacitated or need broader assistance in the future.

Don’t wait until you’re in a bind to consider your power of attorney needs. Contact our Calabasas estate planning lawyers today at 818-334-2805 to discuss both your immediate needs and long-term planning goals.