When you establish a Financial Power of Attorney, it is with the intent of appointing a trusted person to take care of your finances in the event of your disability. But did you know that not all Powers of Attorney allow your agent access to your retirement plan?
In order for your agent to have the authority to access and manage your 401(k), IRA, or other retirement plan, your Power of Attorney must contain specific language authorizing such access. If you have a do-it-yourself Power of Attorney, or even one that was drawn up by an attorney but is several years old, your agent might not have all the authority you think they have.
How can you make sure that your Power of Attorney will function effectively if you become incapacitated? You’ll want to have it reviewed by a qualified estate planning attorney. He or she can let you know which powers your agent does – and does not – have. If your agent does not have sufficient authority to manage your retirement accounts, your attorney can put in place a new Power of Attorney.
Of course, if you don’t have a Power of Attorney, you’ll want to meet with an estate planning attorney while you’re still alive and well. He or she can make sure you have a fully functioning incapacity plan so that, in case you become mentally disabled, the people making decisions on your behalf will be those you have chosen, and not those a court chooses for you.
Stephen A. Mendel, Estate Planning Attorney
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