Power of Attorney and Assets: What Can I Transfer?
There are plenty of myths and misconceptions about exactly what a power of attorney allows a person to do. If you are your parents’ power of attorney and you want to take action on their assets, are you allowed to under the law. The abilities of a power of attorney vary from state to state. However, there are some commonalities that fall under the federal Uniform Power of Attorney Act. These can help answer asset questions.
What is Power of Attorney?
A power of attorney is a legal agreement between yourself and someone else that they will make financial decisions for you if you ever become incapacitated. Anyone can be your power of attorney.
Do I Need a Power of Attorney?
Everyone should have a power of attorney, but you don’t necessarily need to use it at all times. Before you attempt to move assets under a power of attorney, you should talk to your attorney. You should be sure that the subject in question is still legally able to sign their own agreements. Sometimes, a person can seem incapacitated. However, it’s possible that legally they are considered capable of making their own decisions. In most states, it is much easier to transfer assets with the signature of the asset owner than it is with a power of attorney.
The Limitations of the Power of Attorney
In most states, if you want to transfer a large asset such as a house to yourself using a power of attorney, then the ability to gift large assets to yourself must be specifically spelled out in the power of attorney document. There are several forms of power of attorney. Each of those forms has limitations. You can transfer large assets with a power of attorney, but only if the documentation allows you to.
Can I Transfer Any Assets Under a Power of Attorney?
Each state has laws in place to protect someone who has a power of attorney from being taken advantage of by the person who holds that power of attorney. While transferring assets is possible in most states, it does require a lot of paperwork. There might be tax implications with transferring assets. If you bring your parents’ assets into your financial world, then your parents’ assets could be exposed to any lawsuits or judgments against you.
Creating a power of attorney is not difficult, but using it can be a challenge. If you are having issues with a power of attorney, then contact one of our professional estate planning attorneys immediately. We will provide the answers you need to your important asset questions.