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To win football games, a team needs to score touchdowns, not just kick field goals, when it reaches the “red zone.” Kicking field goals, rather than scoring touchdowns between the 20-yard line and the end zone loses football games.
In this blog, we discuss “How to Score a Touchdown with a Financial Power of Attorney” by avoiding probate court after you become incapacitated.
A Financial Power of Attorney (“POA”) is used to avoid a guardianship proceeding in probate court if you become incapacitated due to a stroke, dementia or another illness. Avoiding probate court can saves money and time and allows your family to manage your affairs privately rather than through the public process of a guardianship. However, just signing a POA only gets you to the “red zone.” Many financial firms will not accept a POA if it is too old. It is keeping a POA updated that gets you out of the red zone and into the end zone. To score a touchdown with a POA, it must be kept updated. We recommend that yours be updated every 5 years.
For example, we knew a family who took care of their elder grandfather, who had advancing dementia, for many years. However, it got to the point where they needed to place him in a nursing home. Due to, their grandfather’s dementia, he didn’t have the mental capacity to sign a contract with the nursing home. Since he hadn’t executed a POA, the nursing home required that a guardian sign the contract. The family had to spend over $2,000 and it took over a month to get someone appointed the guardian. This could have been avoided if a POA had been signed before his dementia became severe.
If you’re interested in learning more about scoring a touchdown with a Financial Power of Attorney other estate planning needs, please call Marty Bodnar at 734-665-4441 or email him at email@example.com.