One of the main goals in having a Power of Attorney is to allow your agent (also called your attorney-in-fact) to fully manage your finances in the event that you develop Alzheimer’s disease, have a stroke, or otherwise become mentally incapacitated. If this happens, you want your agent to be able to step in and take over your financial accounts and your investments. For most people, this includes the management of a 401(k) or other retirement account.
But, did you know that there’s special language that has to be contained in a Power of Attorney before your agent can access and manage your retirement account? And, if your Power of Attorney does not contain the appropriate language, your family might have to go to court to get access to your retirement account if you become mentally incapacitated.
So, if you have a Power of Attorney, you’ll want to take a look at it to make sure it allows your agent to manage your retirement account. If you’re not sure about this, you can have your estate planning attorney check for you.
If you don’t yet have a Power of Attorney, you’ll want to make sure your estate planning attorney includes the appropriate language. And, you can check with your retirement plan manager. Many plans have their own Power of Attorney forms. If your plan is one of them, you can sign this form and keep it with the rest of your estate planning documents, just to be on the safe side.
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