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POA ends at death. We had POA, but we also were joint on all accounts. My parents wanted us on everything - they made those decisions about 5 years before they passed. I am so thankful that they did - it made everything so much easier.
This is a very important thing to understand but so many don't. Any POA authority you happen to have for someone will cease as of the day of death. If all you have is a POA giving you access to the deceased person's funds, you'll be SOL. If you are faced with paying their final bills or dealing with their estate, you won't have access to that $.
A beneficiary designation (TOD, POD) on some cash value asset of theirs will allow you to claim those funds after death. All you may need to do is present a death certificate/official ID to the institution holding the asset. Very quick and straightforward. BTDT and boy was I grateful for it. I needed funds to deal with my deceased parent's affairs (final bills, final arrangements, other estate-related business) right away. Remember, even if you are an heir named in their will, you'll have to wait for probate to conclude before you can access those funds.
Last edited by Parnassia; 04-21-2024 at 02:28 PM..
In preparing my own will, DPOA, med directive, TODs & PODs, I learned something that does not seem to be well known. And that is that almost all financial entitles want their own POA form to cover any periods of incapacitation.
I had 2 banks, 2 brokerages, 1 annuity, 1 credit card, 2 insurances, that all wanted their own POA form on file. Some were simple, one was ridiculous, 1 wanted notarized. Took about 6 months to get it all done.
OTOH, it can be beneficial to have access to the money if the Mother becomes ill or incapacitated. Having my sister on Dads account before he died, made it so much easier to buy needed items for him, when he was in a nursing home. As well as pay for the funeral expenses.
Fortunately for me, when my mother developed dementia, I was both her POA, as well as joint tenant on her bank accounts. When she moved to a nursing facility, due to the decline in her health, I was able to sell her house, and put the proceeds into several CDs, that would mature at different intervals. As the needs to pay the bills at the nursing home arose, I cashed in the CDs, as necessary.
I just bought another CD and one of the terms stated: Puttable on death of holder. Since it is in a joint account with my wife, she would still be able to allow the CD to mature if I were to go first. (Come to think of it, why is she holding that chopping knife?)
This is a very important thing to understand but so many don't. Any POA authority you happen to have for someone will cease as of the day of death. If all you have is a POA giving you access to the deceased person's funds, you'll be SOL. If you are faced with paying their final bills or dealing with their estate, you won't have access to that $.
A beneficiary designation (TOD, POD) on some cash value asset of theirs will allow you to claim those funds after death. All you may need to do is present a death certificate/official ID to the institution holding the asset. Very quick and straightforward. BTDT and boy was I grateful for it. I needed funds to deal with my deceased parent's affairs (final bills, final arrangements, other estate-related business) right away. Remember, even if you are an heir named in their will, you'll have to wait for probate to conclude before you can access those funds.
Do you have to wait for probate if you are designated TOD/POD? I'd think not... In Arizona, if your estate is valued at under $75K (excluding all designated TOD accts, beneficiary accts, and anything in trust) then probate can be avoided entirely. It's a small estate affidavit then.
My father in law had my husband designated POA, a rather lengthy and comprehensive Durable POA doc was done ages ago and once we got the doctor to agree that he was incapacitated, that went into effect. We had a certification drawn up that the POA was in full force and effect at that point. Yes, some of the institutions still wanted their own special forms done for both the statement of incapacity and the POA.
But the few accounts that didn't have a designated TOD or beneficiary on them...well, one was a pain, even though the will stated that it would pour over into the revocable family trust, we had to get a Gold Medallion Signature guarantee to get it done. If you are temporarily living in an area where you don't have much established for long standing memberships at credit unions or relationships with banks, it can be hard to get one of those. Luckily I had a retirement account at Fidelity and discovered that they would do it easily and FREE. Free! That was super cool of them.
His regular bank account was also in the Family Trust. He had my husband become a co-trustee before he died, so we had uninterrupted access to those funds, which was great because it made it easy to pay his expenses before he passed and various estate expenses just after (which was allowed in the trust agreement.) While we have chafed at some of the restrictions that the lawyers tried to throw at us for use of the trust money further down the road, I've gotta say that in the immediate situation of caring for Dad and dealing with the estate stuff, it did help. I just wish I'd known about how the documentation worked because in our ignorance, we had to get the lawyers to draft a lot of the stuff for us, which was never truly necessary. Essentially whenever something changes with a Trust like that, you need to draw up a "Certification" with a brief explanation of what has happened, what it affects, and the effective date and go get it notarized. Not a big deal, really. None of the documentation for any of this had to be filed anywhere, like with a court or anything. We paid the lawyers a bunch of money when we could have done it ourselves if we'd known better. Oh, well.
But another thing I found...and this might vary by state to some extent... I was able to set up online access for a TON of things while my father in law was incapacitated, and there was no one to demand proof of who I was to be doing any of that. I was able to make sure that most of his bills, for which he'd previously written checks, continued to get paid. To keep an eye on all of his accounts and move funds out of risky investment classes. And whenever I had to call anyone to conduct business on his behalf, the majority of entities were very kind, sympathetic and cooperative with me. I guess on the more alarming side, I can see how it would be pretty easy for someone with bad intent to get into a lot of a senior's accounts with access to their email and that pile of bills and printed statements they keep on their desk. But on the other, if your intentions are good and you're only doing what needs done, well, there are ways to sidestep some of the obstacles.
Do you have to wait for probate if you are designated TOD/POD?
No. This has been explained a number of times here. Once again: accounts that have assigned direct beneficiaries (TOD/POD) do not need to be probated. Once you present the original account holder's death certificate and prove you're the beneficiary you can claim the asset.
In general, when there are federal tax withholdings - why is it usually 15% or less?
Why doesn't the govt allow, say, 50% of your tax to be withheld?
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