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What to know about powers of attorney

On Behalf of | Oct 13, 2017 | Estate Planning |

New Jersey residents should never be pressured into signing a power of attorney document. In fact, it may be a sign of fraud for another person to pressure someone to take that step. As a general rule, those who aren’t ready to delegate financial duties to another person in the event they are mentally incapacitated should step away and reconsider the situation.

Those who are being pressured to sign such a document may want to check to see that no one is trying to access their accounts without permission. Bank or brokerage accounts may be prime targets for anyone engaging in a scheme that includes gaining power of attorney. There are two main parties to any such document; the person who creates a power of attorney is known as the principal while the party who acts on that person’s behalf is known as an agent.

A power of attorney could give an agent the power to make all financial decisions on the principle’s behalf. It could also provide limited abilities to pay bills or make trades in a investment account. The person who grants a power of attorney may also be able to revoke it at any time. In some cases, the document has a limited time in which its terms can be enforced.

Wills and trusts may be effective estate planning tools. Creating financial or medical powers of attorney may also be ideal for those creating an estate plan. It could make it easier for an individual to have his or her wishes upheld while mentally incapacitated. However, those who aren’t sure that they want to create such a directive may wish to take their time before doing so. They might want to consult an attorney to help oversee their financial plan.


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