Jan 19, 2016 Where Your Durable Power of Attorney Won’t Work

You’ve seen a qualified attorney and drafted up a Durable Power of Attorney so your loved ones can act on your behalf if you become incapacitated or disabled. You think everything’s set. But is it? A DPOA is a widely recognized and useful legal document, but it may not work in every situation.

Social Security Administration:

The SSA does not recognize DPOAs. Instead, it has its own classification called “Representative Payees”, who are responsible for managing and spending the beneficiaries Social Security payments.

Needing to become a representative payee may seem daunting but the process is relatively simple. You must be interviewed face-to-face at a nearby Social Security office and then complete a form. To learn more, visit www.SocialSecurity.gov/payee/index.htm  or call 800-772-1213.

Internal Revenue Service

The IRS will accept a durable power of attorney when the document authorizes the named decision-maker to handle tax matters. But, the authorized agent will be required to execute IRS Form 2848 and file an affidavit before being recognized by the IRS. Luckily, the affidavit needs to be only a couple of sentences. To learn more, see IRS Publication 947, which you can get online at http://www.irs.gov/pub/irs-pdf/p947.pdf or call 800.829.1040.

Banks and Financial Institutions:

While your bank should accept a DPOA, many have rules about how recently the DPOA needs to have been drafted. For example, many will not accept a DPOA that is more than 2 years old. You may need to call each bank or financial institution to get their exact requirements.

 

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