Blogs > Your Money

Dave Patterson and Erin Preston, a father-daughter team of Certified Financial Planner® licensees, provide thoughts and suggestions on a broad collection of personal finance topics.  Information provided in this BLOG is intended to be of a general nature and may not be appropriate for all situations.  Readers should consult with their own financial advisors before relying on any information contained herein.

Saturday, October 9, 2010

Your Power of Attorney Isn’t Enough

We’ve written before about powers of attorney (POAs) being ineffective. If you don’t take some action with respect to your POA, your designated representative may have great difficulty helping you with your investment accounts, should you become incapacitated. We decided it would be beneficial to our readers to review this subject, once again. In addition, we conducted a short survey with three mutual fund companies to determine their policies with respect to POAs.

In a previous series of articles we have covered the basics of estate planning. The articles are no longer available on the Oakland Press website but may be viewed on our website by going to our “In the News” web page and clicking on the “Estate Planning” topic.

In those articles we pointed out that at a minimum, everyone needs a will, patient advocate form and power of attorney. Should you become incapacitated, and unable to conduct your own business affairs, a durable power of attorney gives authority to another individual or individuals to act on your behalf. Or does it?

A phone survey of Fidelity, Schwab and Vanguard discovered different procedures regarding POAs:

Fidelity: Your POA may be affective but you need to complete an Affidavit and Indemnification form and then send your POA to Fidelity along with the Affidavit form for their review. If approved, your POA will provide the authority you desire.

Schwab: With Schwab, you just need to send a copy a copy of your POA along with a list of the non-retirement accounts to which the POA pertains, to Schwab Operations Center, P.O. Box 628291, Orlando Florida 32862. Schwab will review your POA to determine if it meets their requirements and notify you if the POA is approved.

Vanguard: Vanguard has its own POA form that you must complete.

If you’ve invested with other financial institutions we recommend that you call them to see what their policies are.

We suspect that all three firms will honor existing POAs, should a customer become disabled without previously taking the steps noted above, but probably not without having to jump through several hoops. We believe it’s wise to make sure you have taken the necessary steps in advance of needing a POA. Few people know of these requirements. If you haven’t done so, make this a priority on your “To Do” list. While you’re at it, it’s probably a good idea to check to see if your bank will honor your POA too.


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