Do I Need Financial Powers of Attorney in Maine?
“Do I need financial powers of attorney?” is one of the most frequently asked questions we get from clients. Let us respond to that question with the following counter-questions:
- Do you know who will manage all of your financial duties if you are ever unable to express your own decisions?
- Do you have someone you trust to deposit or take money from your bank account?
A Maine financial power of attorney allows you to nominate someone to handle your financial affairs and health care considerations if you are unable to voice your intentions. Because it ensures your preparedness, a financial power of attorney is one of the most important legal instruments you should include in your estate plan.
Jackson Estate Planning’s Maine estate planning attorney can help our clients by providing them with legal guidance and legal services that they can use to create a solid POA. We can also help you if you need help with things like elder law or probate law.
Schedule a FREE ESTATE PLANNING AND ASSET PROTECTION STRATEGY SESSION with our South Portland estate planning attorney now!
What is Financial Power of Attorney?
In a financial power of attorney, you (the principal) choose an agent who is authorized to make financial and property decisions on your behalf. This legal document specifies the circumstances under which your agent may act on your behalf and the powers you grant to your agent. When the principal dies, the power of attorney automatically ends.
Why Should You Sign a Power of Attorney?
Making a durable power of attorney assures that a person you trust (commonly referred to as your “agent”) will be available to handle the various practical and financial duties that will surface should you become impaired. For instance, bills need to be paid, your bank deposits need to be done, and benefits and insurance paperwork need to be handled.
Many other issues may require attention, ranging from house repairs to managing assets or a small company. In most circumstances, a durable financial power of attorney is the ideal way to handle such tasks.
What Kinds of Power of Attorney Are There in Maine?
You can create several different kinds of POAs in Maine. A lot of estate plans, in particular, contain two powers of attorney that take effect even if you fall incapacitated:
- a financial power of attorney, which authorizes someone to manage your business or financial affairs, and
- a health care power of attorney, which authorizes somebody to make health care decisions for you.
Most estate plans include “durable” Power of Attorneys, meaning they remain valid even if you become incapacitated. Most people should make these 2 documents because they help them prepare for the unexpected.
What Legal Requirements are there in Maine for a Financial Power of Attorney?
Certain requirements must be met for your Power of Attorney to be valid in Maine.
Mental Ability to Create a Power of Attorney
A power of attorney must be signed by someone of sound mind. Maine courts may interpret the precise parameters of this mental ability requirement. Consult a Maine estate planning attorney if you are helping someone create a Power of Attorney and are unclear if they possess the required mental capacity.
Although Maine does not strictly need you to get your Power of Attorney notarized, it is highly recommended. Your signature is deemed to be genuine under Maine law if you sign your Power of Attorney in front of a notary public, making your POA more legally binding. Furthermore, a lot of financial institutions will want a notarized power of attorney (even if state law does not necessitate it) before accepting it.
Your power of attorney must contain specific wording that is conveniently set forth in Maine’s power of attorney statute. While the remainder of your power of attorney does not have to be in an exact format, it must contain a notice to the principal (the person who created the POA) along with a notice to the agent. The notice to the principal cautions you that you are handing up broad powers. The notice to agents warns agents that by agreeing to work as your agents, they are incurring certain legal responsibilities.
How to Create a Financial Power of Attorney in Maine?
1. Make the Power of Attorney Using Software or an Attorney
Some private firms provide blank forms or templates that you may fill out to create your Power of Attorney. However, since these forms are sometimes riddled with legalese, it is not always clear how to fill them out. You may utilize a software program such as WillMaker, which walks you through a set of questions to arrive at a Power of Attorney. You may also employ a Maine attorney to draft a power of attorney for you. Along with a will or living trust, many attorneys will incorporate durable Power of Attorneys as part of a more comprehensive estate plan.
Whatever option you pick, the process of creating the Power of Attorney will entail either providing your agent comprehensive powers or choosing specific powers from a list. For example, you may give power to your agent to:
- conduct real estate transactions
- carry out financial and banking transactions
- participate in retirement plan transactions
- invest in stocks, bonds, and other securities
- run a business or entity
- obtain government assistance
- look at tax matters
- Ensure family and personal maintenance.
Unless the document expressly specifies otherwise, your power of attorney in Maine is automatically durable (that is, it continues to be effective after your incapacity). (Me. Revised Statute Tit. 18-C 5-904.)
2. Sign the Power of Attorney in the Presence of a Notary Public.
As previously stated, the Power of Attorney should be notarized in Maine.
3. Keep the Original Power of Attorney in a Safe Location
Once you’ve finished the Power of Attorney, keep the original in a secure location where your family members can easily find it, and notify them of its location. Should you become incapable, your agent may need the original power of attorney to work on your behalf.
4. Give Your Attorney-in-Fact or Agent a Copy.
You too should provide a copy of the power of attorney to your agent so that s/he is familiar with the document’s contents.
5. Submit a Copy to the Land Records Office
If you provided your agent the authority to undertake real estate transactions, you also need to file a copy of your Power of Attorney with the land records office (known as the registrar of deeds in Maine) in the county where you own real estate. If your agent ever has to mortgage, sell, or transfer real estate on your behalf, the registrar of deeds will recognize his or her authority.
6. Consider sending a copy to financial institutions.
You may also distribute copies of your durable financial Power of Attorney to banks or other entities which your agent may need to work with in the future and might save them some inconveniences. Banks may be picky about accepting Power of Attorneys.
Do I Need Financial Powers of Attorney If I Believe I Do Not Need Financial Powers of Attorney?
If you are married, have the majority of your property in a living trust, or own the property in joint tenancy, you may not believe you need financial powers of attorney. In all these cases, however, a durable power of attorney can make things considerably easy for your loved ones and family should you fall incapacitated.
Do I Need Financial Powers of Attorney If I’m Married?
A spouse has some power over jointly-owned property, such as the right to pay bills using funds from a common bank account or sell shares from a joint brokerage account. However, your spouse’s authority to sell jointly-owned property is significantly limited. When an impaired spouse does not agree to such a transaction, the other spouse’s hands are tied.
Without a durable power of attorney, your spouse has no legal authority over property that is solely yours.
For example, Carrie and Michael of New York have been married for 47 years. Their main assets are their house and stock. As joint tenants, they own the house together. The stock was purchased solely in Michael’s name, and the pair have never transferred it into shared ownership. Michael becomes incapacitated and necessitates costly medical care. Carrie cannot legally sell the shares to cover medical expenses.
Institutions may also refuse to do business with a spouse who does not have a valid power of attorney.
Do I Need Financial Powers of Attorney If I Have a Living Trust?
A living trust is not a full replacement for a durable financial power of attorney, but it might be useful if you are unable to handle your financial affairs. This is because the individual who will distribute trust property following your death (known as the successor trustee) also has the power to handle the trust property should you become incapacitated.
The successor trustee, on the other hand, has no control over property that is not held in trust. Few individuals transfer all of their assets to a living trust; most simply transfer assets that are costly to probate, like real estate and valuable securities. A durable power of attorney means that someone is available to handle other people’s property along with day-to-day financial duties.
Do I Need Financial Powers of Attorney If I Own Joint Tenancy Property?
Joint tenancy allows several individuals to own property jointly. When one of the property’s owners dies, the remaining owners instantly inherit the late person’s share of the property.
However, if you become impaired, the other joint tenant owners will have very little control over your share of the joint tenancy property. For instance, if you and another person jointly own a bank account and one of you becomes incapacitated, the other owner is legally authorized to use the money.
A durable power of attorney, on the other hand, allows you to grant your agent control over your share of joint tenancy property, such as bank accounts and real estate.
When a Durable Power of Attorney Isn’t Enough?
A guardianship or conservatorship is seldom desirable due to the cost and intrusion. However, in a few cases, special considerations warrant the process.
You Want a Court to Oversee Your Finances
Don’t make a durable power of attorney if you can’t think of someone you trust enough to serve as your agent, with extensive control over your property and money. A guardianship or conservatorship, with the added security of judicial supervision, can be worth the additional expense and hassle.
You’re Worried About Family Fights
A durable power of attorney is a well-known and effective legal document. Anybody who wants to dispute your money management plans after you’ve finalized yours will have an uphill struggle in court. However, if you anticipate that a family member would contest your document or cause ongoing problems for your agent, guardianship or conservatorship may be better. Your family may still quarrel, but at least the court will be watching out for your well-being and property.
Learn More About Financial Powers of Attorney from Our Maine South Portland Estate Planning Attorneys
Do you want to personally hear the answer from an estate planning attorney if you need financial powers of attorney? Our Maine estate planning attorney at Jackson & MacNichol can help explain this in more detail when you visit them for a free estate planning and asset protection strategy session.
We can also help you create a financial power of attorney that is suited to your specific needs! If you have a concern regarding powers of attorney or need help with your estate plan, please contact us right away!