![]() Upon the proper execution of these forms, both the original owner and new owner are considered joint account owners for the account. Adding someone else to an individual’s financial assets as a joint owner can be done directly at each financial institution through the execution of any forms required by the institution. Joint ownership, the second method of assisting an individual with financial affairs, operates much differently than a Power of Attorney. The Agent has a fiduciary duty to keep the Principal’s assets separate from his or her own funds and to only expend the Principal’s funds in the Principal’s best interests. It is important to note that the Principal’s financial assets are always considered to belong to the Principal, not the Agent. Through the use of a valid Power of Attorney, an Agent can sign checks for the Principal, withdraw and deposit funds from the Principal’s financial accounts, change or create beneficiary designations for financial assets, and perform many other financial transactions. So long as the Power of Attorney is validly executed, financial institutions are required by law to accept the Power of Attorney. Whenever the Agent acts on behalf of the Principal, he or she should provide a copy of the Power of Attorney to the financial institution as evidence of the authority to act. The Agent must also sign an Acknowledgment in the presence of a notary public before he or she may take any actions on the Principal’s behalf.Ī financial Power of Attorney is an extremely powerful document, as it gives the Agent broad authority with regard to the Principal’s finances. In Pennsylvania, a Power of Attorney must be signed by the Principal and two witnesses in the presence of a notary public. The form of a Power of Attorney varies from state-to-state for instance, Pennsylvania recently overhauled its Power of Attorney laws effective January 1, 2015. The Principal retains legal authority to make his or her own decisions, but the Agent may act on the Principal’s behalf in instances where the Principal is unable to act. Powers of Attorney can be for medical decisions, financial decisions, or both. It is extremely important that everyone involved in assisting a loved one with financial matters understand the effect of each method on the individual’s estate plan and the disposition of financial assets after the individual’s death.Ī Power of Attorney is a legal document whereby an individual (called the “Principal”) grants another person (called the “Agent”) legal authority to make decisions. The two most common methods for legally assisting an individual in financial matters are through a Power of Attorney or becoming a joint account holder. This often involves assisting the individual with paying bills for personal, medical, and household expenses. Powers of Attorney or Joint Accounts: What is the Best Way to Assist a Loved One with Finances?Īs loved ones get older, it is becoming increasingly common that children, other family members, or close friends will step in to assist with many activities of daily living.
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