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Your Wealth

How to Protect What’s Yours Across Life’s Situations

Whether due to health issues or simply being on vacation and unable to be contacted in the moment, there are many ways you can end up unavailable to make critical financial or health care choices for yourself or your loved ones. If you’ve not documented your wishes in advance, it can add extra stress for everyone involved and, more importantly, the outcomes may not be what you had in mind.
One potential source of confusion is when and how to protect what’s yours is understanding which legal logistics apply during your lifetime, and which don’t come into play until after you pass.

There are multiple ways in which you can protect your interest. Here are three:  

  1. A financial power of attorney
  2. Trusted contact person(s)
  3. A health care advance directive
The Basics
A financial power of attorney (POA) is a legal document authorizing someone (your “agent”) to make financial decisions on your behalf. No matter how much authority you grant an agent, they still owe you a fiduciary level of care, which means any decisions they make for you must be based on what they believe to be in your best financial interests.

When it applies
A POA applies while you are alive, but unavailable to act for yourself. You can structure it to:
  • Begin immediately or upon a triggering event (such as a debilitating accident or illness).
  • Remain in force during a finite time period or be ongoing.
  • Apply to all your financial matters, or only to specific transactions.
Common scenarios where a financial POA can be helpful to address:
  • Capacity: If you become incapacitated due to illness, injury or dementia.
  • Availability: If you’re unable to be present for a financial transaction, such as if you’re traveling abroad or you’re dealing with an emergency situation.
  • Convenience: If you’d simply like to make it convenient for someone else to be able to make financial decisions for you – such as your spouse or a trusted sibling (in general), your parents (if you’re heading off to college), or your adult children (if you’re aging).
Additional tips:
  • Again, anyone to whom you grant a POA is only your legal agent while you are alive; their authority ends the moment you pass away. Your estate’s trustees should take it from there.
  • Your agent(s) should have access to the documents that describe the POA you’ve granted them. If they can’t prove what their role is, they may not be able to act on it when needed.
  • Some banks and account custodians have their own POA forms they would prefer you use; also, they may be wary of POA paperwork that is several years old. Consider annually reestablishing any durable POAs, to ensure they remain relevant.
  • You cannot grant a POA if you are deemed to be of unsound mind. This makes sense, since you may inadvertently name an unintentional person, or others may be able to contest the POA you’ve established. Take time to prepare early.
The Basics
In 2017, the Securities Exchange Commission (SEC) approved the role of trusted contact person as part of a FINRA Rule 4512 amendment. The amendment requires your account custodians (brokers) to encourage you to name a trusted contact as an extra line of defense for your investment accounts. If the custodian feels you are being financially exploited, they then have a back-up person they can talk to about some of their concerns. The additional input may enable them to delay disbursing funds from your account “where there is a reasonable belief of financial exploitation.”  (Source: FINRA)

When it applies
While the primary aim of the FINRA amendment is to prevent financial elder abuse, there are at least two scenarios when a trusted contact can be useful:
  • If you are unavailable, and the custodian believes your account may have been compromised.
  • If you are cognitively impaired.
Common scenarios
  • Imagine you’re on a mid-Atlantic cruise, and your broker receives a suspicious trade order from “you.” They try, but cannot reach you to verify it’s really you. If there is no trusted contact to reach out to, they may have little choice but to execute the trade and disburse the funds as ordered. If a trusted contact can instead provide evidence that the order is likely fraudulent, your broker may be able to place a temporary hold before disbursing the funds.
  • Similarly, if a loved one is exhibiting signs of dementia, a trusted contact can help prevent them from falling prey to financial exploitation. What if your aging parent tries to empty out their own bank account to help a “friend” in need? If your parents have named you as a trusted contact, an account custodian who suspects foul play or poor judgment can reach out to you, explain the circumstances, and receive your “second opinion.”
Additional tips:
If you’ve named someone as a trusted contact, your broker or account custodian can discuss some of your relevant circumstances with them, and gather pertinent information from them. But a trusted contact cannot make any financial decisions on your behalf, nor can they view your account. Unless you grant it to them separately, a trusted contact does not have a financial power of attorney, as described in Section I.

The Basics
Your health care advance directive can offer two types of protection:
  • Your living will provide your life-sustaining and end-of-life medical care instructions, and related health care preferences, in case a time comes when you cannot state them for yourself.
  • Your health care directive can also name health care representative(s), or agent(s) and grant them health care power of attorney. If you cannot make your own health care decisions, your agent can decide on your behalf, guided by your living will. Medical professionals can also more freely discuss your condition with your agent, without violating HIPAA privacy rules.
When it applies
Your health care advance directive only comes into play if you are alive, but unable to direct your own medical care.

Common scenarios
Accidents and illnesses can rob you of your mental capacity – temporarily or permanently. If you do not have an advance directive in place, health care professionals and/or key family members may have to make medical decisions for you, without knowing what you would have preferred. Also, the individual(s) you would most want to have making decisions on your behalf may not be able to do so if you haven’t named them as your representative(s) in your advance directive.
Additional tips
  • Not only should almost everyone have an advance directive, it should be easy to get ahold of it when needed. Distribute copies to your primary physician and any of your other health care providers or primary hospitals to keep on file. Give it to key family members.
  • IMPORTANT: Do you have a child who recently turned 18? As soon as your child becomes an adult, health care providers may not be able to even discuss your child’s case with you unless you have a health care power of attorney. Also, if your child is attending school in another state, you may need to fill out additional paperwork for the state where the child attends college.  

Contact us today and let us help you sort through the logistics involved in protecting what’s yours.

Atlantic Union Bank Wealth Management is a division of Atlantic Union Bank that offers asset management, private banking, and trust and estate services. Securities are not insured by the FDIC or any other government agency, are not deposits or obligations of Atlantic Union Bank, are not guaranteed by Atlantic Union Bank or any of its affiliates, and are subject to risks, including the possible loss of principal. Deposit products are provided by Atlantic Union Bank, Member FDIC.

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