Power of Attorney – The Most Important Document
Why do you need a power of attorney? Let’s imagine that you have the choice of investing in two different accounts, one will turn your $50,000 into $100,000 in two years, the other will turn $50,000 into $75,000. But there is a catch… The $75,000 you can access anytime you want, but the $100,000, well if you need it, you can’t get it. Which one would you choose?
See, the most important word when it comes to your investment is not growth, is not safety, is not returns. It’s none of that.
There is only one way to be sure that you always have access and that is with one powerful document; the power of attorney. A power of attorney is the only document that will continually give you access to your accounts.
What Is A Power Of Attorney?
If you are incapacitated or you can’t make the decisions, the power of attorney appoint someone else to be able to do that for you. If you’re unavailable or you become incapacitated, a Power of Attorney allows you to appoint someone to handle your financial and other legal matters on your behalf. In other words, the power of attorney allows someone to access your accounts for you when you need it most.
Note, medical power of attorney names someone to communicate your healthcare and end-of-life treatment instructions.
Have you ever tried to call the cell phone company or the TV company and your name wasn’t on the bill? Will they talk to you?
Right, they won’t. Some of you are probably laughing now just thinking about this. You could be the one that paid all the bills all the time, but your spouse was the one that set up the account. Their name is on the account. Unless your name is on the account you can’t talk to them. You can’t make any decisions.
What Is More Important, Investment Growth or Access?
Well, if that’s the way it is with a cell phone bill, how much more do you think it’s like that with your financial accounts? Right now you may have joint accounts on a lot of your accounts, and if you do, that’s great, but I will tell you there are a couple of accounts where you can’t have joint accounts and that is your retirement accounts like your IRA, Roth, or 401K.
Retirement accounts are in one person’s name only, yes your spouse can be the beneficiary, but that is different from a joint account.
If you’re single then a power of attorney is even more important. If something happens, you definitely want to be able to name somebody, whether it be one of your kids, whether it would be a family member, or a trusted friend to be able to make the decisions for you.
Whether you’re married or single and you don’t appoint a power attorney and something happens where you can’t make a decision, then someone is going to have to make it for you. Then, instead of you choosing who it’s going to be, the courts will choose who it’s going to be. So it’s important to have that power of attorney set up.
Let’s say I have some clients in my office and we’re talking and they go out to leave. Our offices in Mineral Point, it’s just this quiet town, so they just go to cross the street without even thinking about it. So, without even looking, the husband steps out in the middle of the street and the truck is coming right at that time and knocks him down. It doesn’t kill him, but sends him to the hospital. I know you’re thinking man, what a crazy story you’re telling, but just just kind of play along with me for a second.
So now this guy’s in the hospital, right? He’s had some brain injuries, so they’re kind of keeping him, you know, sedated for a while. They’re trying to treat all these injuries. He’s probably going to be OK and be able to come home.
The recovery is going to be long and they’re going to need to make some adjustments to their house for him to be able to come back. Now he’s got most of their savings in his retirement accounts so they will need to access his account to make the adjustments to bring him home.
If he doesn’t have a power attorney and we go to call that company to have them send the funds, what’s the company going to say? I need to talk to Mr. Jones. Without a POA, his wife would have to go to court and appeal to be her husband’s guardian before she could access any of their savings in his accounts.
So she is in one of the worst times of her life, but couldn’t withdraw the funds if she doesn’t have this document. This is the document that every one of us needs, but it’s very often overlooked. The power of attorney is the only thing that makes sure that you always have access to your accounts.
Do I Need A Power Of Attorney?
In good times, of course, yes, but also in bad times when you need it most right, you have to have a properly structured power attorney. If you don’t have that, make sure you reach out, give us a call that they will connect you with someone who can help you get that done because you need to have this document!
If you do, you want to make sure that you’re pulling it out and reviewing it at least every few years, making sure it’s accurate and then putting on the back that it was reviewed as of such and such date.
The last thing is that sometimes one of the problems we see with Power of Attorney is every now and then is if we got it 10-12 years ago and the company might say man is this the new one? Is this the current one? How do we know? And they’ll question it. You don’t want that, so we’re going to make sure we review it often. Make sure it’s up to date and be sure you have the power of attorney document. It is the most important document in your life.
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