How to Prepare if You Are Named Power of Attorney

The decision about who will make decisions for you when you are no longer able to is oftentimes a difficult one, but it is critically important. Planning ahead of any incapacity helps avoid lengthy delays, problems, or court cases when you need help. This is where your Financial Power of Attorney (POA) and other advanced directives are helpful.

A POA allows you to name who you want to manage and make decisions for your financial assets. Many married couples choose their spouse as their first agent. Others may name their children or trusted friends as secondary agents.

On the other hand, someone may feel overwhelmed when they become an agent on another person’s POA. As an agent, you are stepping into the individual’s shoes and acting on their behalf.

At Mission Wealth, we work with agents acting under a POA and have overseen many seamless transitions from the individual to the agent acting on their behalf. We are always ready to assist our clients, and our estate planning team can provide clarity and direction.

Steps to Take When You Become a POA Agent

A successful POA transition process requires open communication and preparation on both sides. The person executing the POA should take time to educate their agent of their preferences regarding certain decisions, introduce them to their trusted professionals, including, but not limited to, their Financial Advisor, Estate Attorney, and CPA, and share where important documents and assets are stored. The agent should take time to review all the information provided to them and let the other party know if they have questions or cannot perform the role.

A thorough checklist of items and decisions to consider can help an agent navigate the process effectively.

Below is a list of the most common items and tasks that an agent should be prepared for:

Legal and Financial Items

1. Understand the POA Authority:
   1. Review the POA document to understand its scope (e.g., financial, healthcare, or both) and whether it is “durable” (remains effective if the person becomes incapacitated).
   2. Some POA documents are “limited” in scope to certain powers only, while others are broad and grant the maximum authority under state law. Knowing these limitations is critical, and timely reviews should be conducted to ensure that any named agents will not run into issues because a needed power was not granted in the future.
2. Gather Key Documents:
   1. Driver’s License(s)
   2. Passport(s)
   3. Social Security Card(s)
   4. Trust documents, if any, exist
      1. If a trust(s) is in place, the named successor trustee and the agent for the POA may be different. These two roles must coordinate their efforts, as each will serve a different realm.
   5. Will(s)
   6. Financial Power of Attorney
   7. Medical Power of Attorney
   8. Living Will or Advance Healthcare Directive
   9. Deeds to property
   10. Insurance policies (health, life, homeowners, auto, etc.)
   11. Tax returns (at least for the last 3 years)
   12. Any documents relating to business interests (Organizational documents, etc.)
   13. HIPAA Release/Waivers
3. Financial Accounts:
   1. Bank accounts (checking, savings, CDs)
   2. Investment accounts (brokerage, retirement accounts like IRAs or 401(k)s)
   3. Credit cards and loans
   4. Mortgage statements
   5. Safe deposit boxes
      1. Some banks require additional documentation to access safe deposit boxes. If your bank requires this, ensure you add your agent.
4. Income Sources (check tax returns for other items):
   1. Social Security benefits
   2. Pension payments
   3. Annuities
   4. Rental property income
   5. Required Minimum Distributions from Retirement Accounts
5. Bills and Expenses:
   1. Utilities, rent/mortgage, insurance premiums
   2. Subscription services or memberships
   3. Caregiver or in-home assistance fees
   4. Any automated bill-pay services (check bank statements for others)
6. Tax Responsibilities:
   1. Federal and State (if applicable) returns will continue to need to be filed
   2. Required Minimum Distributions from Retirement Accounts
7. Digital Assets
   1. Email accounts
   2. Social Media accounts
   3. Password storage services (LastPass, Keeper, 1Password, etc.)
   4. Crypto wallets
      1. Most states have updated their laws since 2017 to allow agents to manage digital assets.

Healthcare and Medical Management (If applicable)

8. Medical Power of Attorney/Advanced Directive (State Dependent):
   1. Ensure you’re the healthcare POA or know who is designated. The financial and medical roles are often unified, but if not, this will require coordination between the different parties.
9. Medical Records:
   1. Ensure a HIPAA Release or Waiver is in place.
   2. Gather all medical records and ensure you know the primary care provider and any specialists.
   3. Understand their medical history, diagnoses, and current medications.
10. Care Plan:
    1. Work with healthcare providers to create a care plan tailored to their needs.
    2. Identify any in-home care, assisted living, or nursing home needs.
11. Insurance:
    1. Verify health insurance (e.g., Medicare, Medicaid, private insurance).
    2. Understand coverage limits, prescription drug plans, and out-of-pocket costs.
12. Pharmacy and Medication Management:
    1. Maintain an updated list of medications and dosages.
    2. Set up a system for filling prescriptions and monitoring adherence.

Property and Asset Management

13. Home Maintenance:
    1. Arrange for upkeep, repairs, and security of their residence.
    2. Manage utilities and ensure that you pay property taxes.
14. Personal Property:
    1. Take an inventory of personal possessions and valuables.
    2. Ensure insurance policies for personal property are up to date.
15. Vehicles:
    1. Manage car payments, insurance, and registration.
    2. When the time comes, talk to medical professionals or trusted family members. Together, decide if the person should keep driving. If not, make arrangements for other transportation.

Communication and Documentation

16. Family Communication:
    1. Keep family members informed of significant decisions and progress.
    2. An informed family tends to have fewer issues in the future about questioning the agent’s actions. Usually, your agent knows your family dynamics. You should write down any information about these relationships and share this information with your agent before they start their full-time role.
17. Recordkeeping:
    1. Maintain meticulous records of all financial transactions, medical decisions, and legal actions made on their behalf.
18. Meet Professionals:
    1. Connect with their attorney, accountant, and financial advisor to understand their existing plans and any necessary updates.
19. Logins and Passwords:
    1. Collect login credentials for online accounts (banks, subscriptions, etc.).
    2. Consider a password manager for a secure organization.

Estate Planning

20. Update Documents:
    1. Consult an attorney to review and update estate planning documents if needed.
    2. Confirm any POA allows for changes to estate documents if needed.
21. Plan Coordination:
    1. Ensure beneficiaries on all applicable accounts and insurance policies are up to date.
    2. Ensure that any assets that should be in a revocable trust, if one exists, have been retitled to it.
    3. Document any changes to estate documents or beneficiary designations as soon as possible – the reasons for the change, the new result compared to the old, etc.
    4. Continue to honor any ongoing legacy items with an established precedent or letters of intent, such as family giving or charitable giving.
22. Funeral Planning:
    1. If not already outlined, discuss and document their preferences for end-of-life care and funeral arrangements.

Emotional and Practical Support

23. Caregiver Support:
    1. Identify resources like local support groups or counseling for caregivers.
    2. If needed, utilize specialized aging life care managers or respite care to avoid burnout.
24. Government and Community Resources:
    1. If needed, apply for benefits like Medicaid, veterans’ benefits, or other assistance programs.
    2. Look into local organizations that specialize in dementia or elder care.
25. Monitor and Adjust:
    1. Regularly review their financial, legal, and healthcare needs.
    2. Be prepared to adapt as their condition changes.

Final Tips

• Stay Organized: Create a filing system (physical or digital) to manage documents.
• Act Ethically: Always act in the person’s best interest and separate personal and POA finances. As an agent under a POA, you have a fiduciary duty to the person. If you are unsure if you can take action, ask for help. Even something that seems harmless, like giving gifts to family members, could be seen as “elder abuse” in some places.
• Ask for Help: Consult professionals like estate and elder law attorneys, financial advisors, and care coordinators when needed.

Mission Wealth has years of experience coordinating estate planning, financial planning, and family coordination for incapacity or end-of-life wishes. Please contact our team to schedule a complimentary consultation and review your full life plan.