New York residents who have considerable assets will do everything they can to protect them. These assets will most likely be used to fund everything from retirement to college funds and other major expenses. One great way for New Yorkers to protect their investments is to assign a power of attorney. With a power of attorney form, the creator — referred to as a principal — assigns another person the power to make short or long-term decisions on their behalf. That person is called the agent.
A power of attorney may go into effect immediately, or it could be set up to start if and when the principal is no longer able to make decisions on their own. An agent doesn’t have to just be responsible for financial transactions. They could be responsible for key decisions ranging from health care choices to buying or selling property.
One important area where it’s really important to have a power of attorney is regarding the principal’s retirement plans, including 401(k)s, annuities and IRAs. Some people assume that their family members will be able to access their retirement plans if something were to happen to them. Unfortunately, many people find out too late that that’s not the case. If a person were to become mentally incapacitated, no one would be able to access their retirement accounts without a power of attorney. The powers of attorney that covers retirement accounts like 401(k)s need to be specific to those types of accounts. Regular powers of attorney will not cover 401k, IRAs and annuities.
Powers of attorney can be very complex documents, but they can help protect financial interests and loved ones in case of any issues down the road. With help from an estate planning lawyer, one could set up the necessary documents.