KNOW YOUR RIGHTS #5

Who Will Help Me Pay My Bills if Something Happens to Me?

Using a Power of Attorney to Manage Your Money

Gladys Truman can’t speak clearly or write, since her stroke.  But Gladys still knows what’s what. Her son, Paul, is worried about how her bills will get paid. He can’t sign her checks, and the credit card company told Paul that they can’t talk to him about his mother’s account. A friend of the family told Paul he’d need to go to court to help Gladys. Is there any other way for Paul to help Gladys?

How can I make sure someone else can handle my affairs when I cannot?

You can sign a legal document called a Power of Attorney (POA). This gives another person, known as your "agent," the power to handle your money and property.

It gives banks and other companies proof that the agent has the legal authority to handle your affairs. Then, if something happens to you, your agent can take care of things.

What can my agent do with a Power of Attorney?

That’s up to you. You can give your agent the power to do almost anything you can do with your money or property. Or, you may choose to limit your agent’s power as you see fit. Here are some common examples of what agents can do:

• Write and sign checks to pay your bills

• Cash checks

• Buy or sell things for you

• Collect money others owe to you

If I sign a Power of Attorney, do I give up the right to handle my own affairs?

No! You can still manage your own affairs as long as you’re willing and able. Signing a POA means that someone else will be able to handle your affairs when you cannot.

It doesn’t mean you give up any rights to your money and property.

When your agent does start handling your affairs, they must handle your money and property the way you want. The law says that your agent must do what is in your best interest.

How do I choose an agent?

Ask yourself these questions:

• Do I trust this person to handle my money for me when I can’t and no one else is watching them?
The agent will have access to your money and property. In most cases, the agent only reports to you, and no one else.

• Does this person handle their own money well?
A sloppy agent could make mistakes that cost you money. If the person can’t balance a checkbook or has recently gone through bankruptcy, you may want to name someone else as your agent.

Does the court need to be involved?

No. That’s the best part. The benefit of signing a POA is that it gives someone else the legal power to do things for you when you can’t. But, if you don’t have a POA, and something happens to you, your family may have to go to court and ask the court to give them the power to handle your affairs.

How do I get a Power of Attorney?

Talk with a lawyer who can help you decide what’s best for you. If you’re 60 or older, a free lawyer from Legal Services for the Elderly may be able to do a POA for you.

Even if we can’t, we may be able to refer you to a lawyer in your area who will do it for less than the usual cost. Please call us at 1-800-750-5353 to learn more.

Don’t use a pre-printed form from an office supply store, a library or the Internet. Some of these forms aren’t legal in Maine. Even if the form is legal, it won’t give you the best legal protection.

Where should I keep my Power of Attorney?

Keep the original POA in a safe place at home. Make sure to put it in a place where it can be found if it’s needed, not in a safe deposit box. Give copies to your agent, your bank, and any other persons or groups your agent may need to deal with.

Can I add a relative’s name to my bank accounts instead of getting a POA?

It’s quick and easy to add another name to your account so that person can handle your money if you can’t. You just sign some forms at the bank. If you don’t have any other money or property, a joint bank account may work well for you. But there are risks.

The law says that both people on a joint bank account own the money. This means that the other person does not need your permission to withdraw it. Sadly, some co-owners abuse the trust placed in them and take all the money.

By contrast, an agent would not become a co-owner of your money when you sign a POA. Instead, your agent has a legal duty to use the money for you. And, if you go to a lawyer who does "elder law," they can write a POA for you that limits the agent’s power. This gives you even more legal protection.

Please read Know Your Rights #6 on joint bank accounts to learn more. If you don’t have a copy, call Legal Services for the Elderly, and we’ll send one.

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