It allows you to pay your parent’s bills
My father and I had spoken several times about my role as financial durable power of attorney for him and for my mother. But when he went into the hospital in November of 2014, I discovered the papers had never been signed or notarized. (Jump to Lessons Learned)
As the child in closest proximity, dad had asked me to take on the responsibility of paying the bills if he became unable to do so. We discussed finances and bills so often, we both thought we had taken care of business. Imagine my surprise when I went into the files to find his document and it was unusable. Yikes.
New Jersey does not require that the Durable Power of Attorney document be completed by an attorney. Since dad had downloaded and revised the online form, I brought it to the hospital for him to sign, a friend met us there to notarize it and two family members served as witnesses.
That same day, we signed, witnessed and notarized my mother’s financial power of attorney. Having this in place for my mother would make all the difference in the world when dad died.
I was honored that dad trusted me to act in his best interest and happy to take financial worry off his shoulders while he was in the hospital. But I was glad that once released, dad resumed paying the bills.
- Typically, hospital personnel are not allowed to witness a financial legal document such as the Durable Financial Power of Attorney. However, hospitals often allow their staff to witness a Healthcare Power of Attorney document.
- You want a durable financial power of attorney document for each parent. Having my mother’s in place prior to my father’s death allowed me to: change bills into her name; and pay bills; as well as talk to: investment counselors, social security, her bank, the Veterans Administration and any one of dozen institutions that require this legal document.
- New Jersey allows for three types of Financial Power of Attorney. (Source: New Jersey Power of Attorney Forms. You will need to research in your state to see if these three types are available.
- Limited – allows you to choose someone to act as agent and handle a specific monetary matter on their behalf. The form becomes void upon completion of the act or at a stated expiration date.
- General – allows you to choose anyone to be your agent to handle financial affairs. This form becomes void if you become mentally unable to think for yourself.
- Durable – allows you to choose an Attorney-In-Fact to manage your financial affairs like paying simple bills or managing investments. A secondary agent should be named if the first choice is unavailable when needed. To specify that the document goes into effect immediately, the document must be specified as “Durable”, or it ends upon your incapacitation. It becomes null and void upon death of the individual. You can put into place a “Springing Durable” Power of Attorney which only takes effect if your physician certifies that you are incapacitated. (Additional resource: NJ Goverment Durable Power of Attorney FAQ)
- When we go to the doctors office, I often sign the payment guarantee forms with POA after my name. Never just sign the form. It is your signature with POA after it that should absolve you of any financial responsibility. But read the forms carefully. For example, if I was admitting my mother to a facility: “Many admission agreements include provisions that the child who is executing the document may also be acting not only as a legal agent for the prospective resident but as a ‘responsible party’ who, separate from the prospective resident, makes certain promises in the contract, which can include making the parent’s financial resources available for the payment of care. Read more:Bankrate answers “Can wages be garnished as POA?”
- Just an FYI. I came across this item in my research but have not had an issue acting as POA for my mother. “One of the biggest problems with any power of attorney is there is no guarantee that it will be accepted or recognized by third parties. For example, if the purpose of the Durable Power of Attorney is to deal with governmental agencies, such as the Social Security Administration, the Veterans Administration or the Internal Revenue Service, one must either use the agency’s special Power of Attorney form, or make sure that the Durable Power of Attorney presented to the agency contains the special wording required by each agency’s particular form.” (Source: What are some problems with the Durable Power of Attorney? l)
Disclaimer: The material in this blog is for educational purposes only. It is not intended to replace, nor does it replace, consulting with a physician, lawyer, accountant, financial planner or other qualified professional.
