Author: Craig Simms

Author: Craig Simms


Stewardship in Planned Giving

LinkedIn Twitter Facebook Download Discover the game-changing role of stewardship in our latest nonprofit resource, “Building Lasting Donor Relationships through Stewardship in

Avoid a Generational Mess: Part 2


LifeLegacy has written a series dedicated to providing clarity around the importance of creating, storing and sharing our wishes regarding property and assets when we pass. In 2022, these tools should be widely accessible to all Americans. 

In Part 1 of this series, we discussed the need to create or update crucial documents. We specifically addressed the importance of having an updated last will & testament and how financial service firms have a unique opportunity to make these tools available to prospects and clients digitally. But there are other crucial parts of the planning puzzle. Here in Part 2, we will focus on creating financial power of attorney and advance health directive documents. These important directives are not just for the wealthy, but should be positioned as tools for every American to complete and store as selfless acts that ease the burden on our families.

Financial Power of Attorney

Advanced planning is hard. No one enjoys discussing death, especially with loved ones. But stating your intentions and wishes through a will, financial power of attorney and advance health directive is an act of love that provides specific guidance to anyone involved in carrying out your intentions. If you don’t express your specific preferences in these documents, then the law in your state will make those decisions for you.

State law also specifies the procedure for confirming each family member’s authority and suggests the procedure for resolving indecision among family members. Ugh! Not a good situation for you or your family!

In its essence, a Financial Power of Attorney is a legal document that enables a designated adult to be responsible for your financial affairs if you are unable to make these decisions yourself. 

To determine the power of attorney case your situation calls for, you’ll need to get familiar with the common types of power of attorney to ensure you execute the correct version.

By its nature, a financial power of attorney like the kind provided by LifeLegacy, is generally used when you are incapacitated. You are considered legally incapacitated when your decision-making skills are either temporarily or permanently impaired due to injury, illness, or a disability. An example would be if you develop dementia and cannot make appropriate decisions or are unconscious after having been in a car accident. You can grant the power to make decisions immediately, or specify that powers be executed “only when it has been determined in writing, by my attending physician, that I am unable to properly handle my financial affairs.”

Because of the seriousness of this responsibility, the person assigned by you to make these decisions should be someone you absolutely trust.

When you decide to create a financial power of attorney document, you are giving permission for someone else to act on your behalf for all of your financial matters. As the creator of the document and the person whose wishes are contained therein, you are considered the principal while the person you are assigning as your surrogate (the person who has the power to make decisions on your behalf) is called the agent.

A valid power of attorney will typically ask who the principal is, who the agent is, and what powers are given. It may also ask how long the power of attorney will last. Also, you can designate a successor agent just in case the original agent cannot, or will not, carry out their duties. The document will also ask you to specify which responsibilities and powers are granted to your agent. You can select only those for which you are comfortable and appropriate, including banking, investments, retirement plan management, real estate, etc.

We’ve been discussing the value of creating a financial power of attorney, but the power of attorney tool comes in other varieties that can meet the specific needs of the principal.

  1. General Power of Attorney – a principal (usually an elderly person) is still able to make decisions, but grants an agent broad decision-making powers. The role of the agent in this case is to support the principal under their general guidance or supervision, as long as they are still able to make their own decisions.
  2. Special or Limited Power of Attorney (Springing)the agent can only act and make decisions on specified activities, and only to the extent that the principal authorizes. One example of this is a necessary transaction (such as real estate) that takes place far away. You may assign a limited financial power of attorney to a person you trust who can execute the transaction in-person when you cannot be there yourself. The agent’s authority ends after the transaction is complete.
  3. Durable Power of Attorney – A permanent and broad version of the power of attorney document, an assigned agent can carry out a variety of duties including: 
    • Act in the principal’s behalf on any matter
    • Sign legal documents
    • Advise medical professionals on any healthcare decisions for the principal (usually accompanied by an advance health directive)
    • Make financial and business decisions
  4. Healthcare or Medical Power of Attorney – This is also known as an advance health directive and the document takes effect as soon as the principal is incapacitated. This could include the following situations where you:
    • Suffer from Alzheimer’s Disease or another form of dementia that impact your ability to make rational decisions
    • Are under general anesthesia
    • Have an illness (like a stroke) that left you unable to communicate
    • Had an accident that left you in a coma or unconscious state

Finally, at least two witnesses are required to be present when you sign your document –they will attest to your signature’s authenticity. While some states do not require you to have your power of attorney notarized, taking this extra step makes the document more legally sound and ironclad. 

LifeLegacy is dedicated to making these important tools available to all Americans, no matter their financial status. To learn more about how you can complete a power of attorney and other important digital planning documents, or if you are an insurance company, BGA, bank or credit union and would like to offer digital end-of-life planning tools to prospects and clients as part of your effort to provide financial education and fiscal fitness to your prospects and clients, contact me today at craig@lifelegacy.io. www.lifelegacy.io


Stewardship in Planned Giving

LinkedIn Twitter Facebook Download Discover the game-changing role of stewardship in our latest nonprofit resource, “Building Lasting Donor Relationships through Stewardship in

Coming Soon!

Be the first to get notified when we go live with our will product.

[mc4wp_form id="1118"]