Plan as if you are single! While that might seem rather negative if you are married now, there is merit to planning for a time when perhaps you will not be. Ninety percent of women will be in charge of their finances at some point in their lives due to death, divorce, or inheritance. Having the means to support oneself eliminates the “Bag Lady” worry. But what is more important sometimes is how to plan for the unexpected if you are single and have the means but not the capacity to access your funds.
Recently we have had two instances of single women needing to have their children able to access their accounts. One client was preparing for the “what if’s” while the other was actually a daughter of client that was in the middle of a “what if”. Simply listing your beneficiaries on an account, or having a will, or even giving Limited Power of Attorney (LPOA) status to others on your accounts does not give enough access to the accounts at a critical time.
It is prudent to do your planning so that when you die your assets are distributed as you desire. But there is the potential for an interim time between when you are capable (mentally and physically) of accessing your funds and when they are ultimately distributed and this can be a very critical time. As fiduciaries on your accounts banks, investment firms, etc. are not allowed to move money on your behalf simply by the request of a loved one. Even if your children are listed as beneficiaries on your accounts it does not give them authority to direct the movement of money for you.
A Durable Power Attorney (DPOA) gives those you choose as trusted representatives the ability to access your accounts. For example, if you are in a car accident and end up in the hospital for a prolonged period of time, how will your bills get paid? What if you require substantial funds for your care? You may be temporarily incapacitated. No one can legally access your accounts if there is not proper documentation. A Durable Power Attorney is a notarized signed agreement that allows you to give a trusted representative access to your accounts. Of course the downside to this is that when you are healthy and able, the DPOA continues to be in effect.
It is for the “what if” moments that we cannot predict only plan for. If, at some point in your life, you find yourself single you should think about these moments before they occur. Also don’t forget to let a trusted representative know where your “important” papers are located so if there is an emergency they are readily located.
You know the saying…”Better Safe than Sorry.”