>> The Durable Power of Attorney
>> Choosing Your Attorney-In-Fact
Consider These Options
A durable
power of attorney lets you authorize your attorney-in-fact to do any number
of things in your stead, limited only by the laws of your state. For example,
he or she can be given the power to continue implementing your plan to reduce
the size of your estate with annual tax-free gifts to your heirs (currently,
up to $10,000 a year to an unlimited number of donees; $20,000 if your spouse
consents).
However,
for the IRS to permit these gifts to reduce your taxable estate, the durable
power must expressly authorize your attorney-in-fact to make such gifts.
You can also provide for charitable donations, payment of medical bills,
and tuition disbursements. Your attorney-in-fact can, among other things:
- oversee trust accounts, annuities, and
insurance policies;
- manage your investment portfolio;
- forgive or collect debts owed to you;
- file tax returns and pay taxes;
- represent you in legal matters;
- manage your business; and
- provide for your medical care.
Bear
in mind that some financial institutions (e.g., a bank or brokerage house)
will honor only powers executed on forms prepared by them. Therefore, more
than one document may be required. Note also that one thing your attorney-in-fact
cannot do is change your will.
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