EPS 22 - Power of Attorney: Planning Ahead Before It’s Too Late

As parents age — or even in your own life — there comes a point when someone may need help managing financial or health decisions. That’s where a power of attorney (POA) becomes critical.

In this episode of the Pink Money Podcast, Jerry explains:

The different types of powers of attorney (general, durable, limited, healthcare, and springing).

Why timing matters — and why waiting until a loved one is incapacitated is too late.

Common pitfalls, like banks rejecting older POAs or requiring their own forms.

The limits of a POA (valid only while someone is alive) and when executors take over.

How to avoid headaches by reviewing and updating POAs regularly.

Takeaway: A power of attorney is one of the simplest, most powerful estate planning tools — but only if you put it in place before it’s needed. Don’t wait until a crisis forces your hand.

💬 Have a question or comment? Contact Jerry here

Transcript

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The best things in life are free But you can give them to Hey, hello, hello,

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hello. Welcome to the Pink Bunny Podcast. I'm Jerry. I'm your host and... This is where we talk all things related to money from a gay perspective. And you know what I've been thinking is, you know, as your parents get older, what really happens is there comes a point that they... are unable to handle their financial affairs and make decisions for themselves. And when that happens, what you really need to have in place is a document like a power of attorney that's going to allow you to handle their financial affairs for them. So this is a document that you can draw up with the help of an attorney, right? You can do some of the online ones as well. Usually they either have to probably be notarized or at least witnessed, etc. And they have to be drawn up drawn up when the person is capable of making that decision to appoint you as their power of attorney and be able to sign it. Now, if you wait too long and they're at the point that they don't recognize you or they're incapacitated, their dementia has kicked in, they're not making those decisions or they don't know who you are, et cetera, then obviously they're not going to be able to sign it because that's not going to be valid and it can be easily contested. So not something you want to really wait on. Now, when should you do it? Hard to say, right? I mean, you could do it for yourself right now. You could wait. It really depends. A lot of people will drag their feet for whatever reasons on doing a lot of the estate planning documents, et cetera, the wills, power of attorney, living will, those kind of things. But it's really a good idea because there's all sorts of situations that could require a power of attorney. Now, there's different kinds. There can be a limited power of attorney that you often see sometimes for just very specific things like like signing a document or be able to handle a particular transaction, etc. Those are fairly common, and they just sort of have like a one-time use, so to speak. And... They're easy to execute because you're only saying to this person, hey, you can handle this situation for me. It's not like a general power of attorney or a durable power of attorney that gives them broad powers to handle almost everything on your behalf because you've then ceded that authority over to this person. Hopefully, it's someone that you trust, rely on, and makes good decisions. Because they're going to be making those decisions for you. There's also health care powers of attorneys so that if that person is incapacitated, maybe, God forbid, there's an auto accident or something and that person's on life support and you need to make some health care decisions for them. That, again, is a tragic situation, but it happens, and that can happen, of course, at any age. So good reasons to have powers of attorney. There can be springing powers of attorney, and that just says if this event occurs, then this power of attorney will go into effect. So it really just depends on how comfortable you are, again, giving that control to someone and given the circumstances. If you're just doing your estate planning documents, you may just appoint your spouse as your power of attorney. It could be, though, that you're on your own and you need to appoint a friend. It could be some relative, et cetera. But it really just depends, right? Yeah. you've got to think ahead because even in that circumstance, if let's say that person is unavailable or they are unreachable for some reason or incapacitated themselves or they're dead, then that power of attorney really didn't do anybody any good. So you've got to think ahead and maybe get a couple people if, again, the situation warrants it. So The things that I was thinking about is, again, going back to your folks, if you have that kind of situation happening, because a lot of people, again, experience a lot of depression. you know, sad effects of dementia as they get older. I know I was speaking with a friend of mine this last weekend, and she works in a memory care unit, and she was telling me that, you know, she experiences a lot of, you know, attachment to a lot of the residents that unfortunately is short-lived because, you know, the people pass away. And it's very difficult because, of course, you know, your attachment and you expect you're attached and you expect them to always be there. And then something happens and they're gone. And she was just saying, you know, that a lot of men typically are going to pass away at the age of 75. And a lot of women typically pass away at the age of 83. And statistically, that's right. I mean, usually I know that I think that we always used to say that women, the wife will typically outlive the husband by at least 15 years after he dies. Whether that's 100% true, I don't know, but it's pretty common. I'm sure it's pretty close. So nevertheless, just thinking ahead, planning ahead, and making sure that the right person's in place. That's all I'm saying. And the power of attorney, getting back to that, I would say it's a good idea to get it sooner rather than later, especially, again, if it's for your elderly parent or parents, because you really want to get it over to their bank or whatever financial institutions that they do business with. I know that they will scrutinize it and they may reject it. I know that the power of attorney I submitted for my mom was rejected by one place three different times for a few different reasons and kind of took a while for us to get into place. And then it just was an ordeal. And then you got to drag the person in and out of the bank or what have you. Now, even a lot of institutions, I know that they have their own powers of attorney. They don't accept attorneys. outside powers of attorney, or if they do, it's kind of a lot of hoops to jump through. Some places, they will reject a power of attorney if it's not, you know, drawn up within three years three years of use so there's all sorts of weird stuff that happens and all I'm saying is that may be stuff that you're unfamiliar with and you could be just caught at the wrong place wrong time and even though you have that thing and it's in your hand and you're sure that it's valid etc it may get all hung up and then that again doesn't help you at all so you only need a power of attorney during someone's life while they're alive once they're dead then that That's the end of that power of attorney because it doesn't need to be used anymore. At that point of someone's death, then the executor or the administrator of their estate, then that person will take over and they will have letters of testamentary, usually from the probate court, and that allows them to handle all the financial affairs of the deceased. So the power of attorney... only good during life and again within usually very specific circumstances or very broad situations again if it's sort of your overall estate planning journey but it's a good reminder that if you have someone that you work with a good attorney a good estate planning attorney it's something that you might want to revisit i don't know if you have to revisit it every single year but Given some circumstances, it may be a good idea to review it on at least, let's say, every three years. Only because, again, I know that that circumstance happens out there. So it's something to be aware of. And if the institutions that your family uses, ask them, do you have your own powers of attorney that you can send me, mail me, I can download, what have you. And then, again, you just follow whatever the signatures and if they require a notary or whatever. is and you do all that and then you send it back and hopefully that just stays on file so just a good FYI that just was on top of my mind especially after I was talking about this and you know it's just good for you good for them and good all the way around so I'm going to leave it there hope you're having a great day and we will talk at you later