The Planner's Perspective: Who is your Agent?

Paul Morrone |

By Paul Morrone CFP®, CPA, MSA

Who can legally make financial decisions on your behalf if you are incapacitated? How about medical decisions? If the answer to these questions is ‘I don’t know’ or ‘I can’t remember’ then it is highly likely that you have not thought about your estate plan anytime recently, or may not have a complete plan in place. In a broad sense, an estate is not just a tally of all of your assets that defines your net worth at death. Your estate is a living entity even while you are alive and encompasses not just your assets, but your responsibilities and liabilities as well.

Properly managing your estate is a lifelong process, a key aspect of which is making sure you have named the correct parties as fiduciaries in the event that you are unwilling or unable to act on your own behalf. It may be something as simple as allowing your spouse to sign your name at a real estate closing you don’t want to attended, or something as complex as having a trusted child manage your financial affairs if you suffer from a degenerative disease later in life. This individual is your designated agent, which is documented in a Durable Power of Attorney. While there are many types of power of attorney designations (limited, springing, durable, healthcare, etc.), one of the most common is a Durable Power of Attorney (DPOA), durable meaning that the power of attorney remains valid even after you become incapacitated.

Having a valid agent appointed in a DPOA is a critical part to managing your estate during your lifetime and can help streamline your affairs if something unexpected were to happen. Here in Connecticut, we have just recently revamped the power of attorney statutes (as of October 2016) and have made material changes to the powers that can be granted to an agent. If you have an existing DPOA already executed, not to worry, it is still valid under the new regulations. However, just because it is valid doesn’t mean it is still suitable; it may be wise to review your existing arrangements to determine if a newly executed DPOA will better suit your needs.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. US Wealth Management and LPL Financial do not provide legal advice or services.