Beyond Signing Checks

In addition to managing your day-to-day financial affairs, your attorney-in-fact can take steps to implement your estate plan. Although an agent cannot revise your will on your behalf, some jurisdictions permit an attorney-in-fact to create or amend trusts for you during your lifetime, or to transfer your assets to trusts you created. It is prudent to include in the Power of Attorney a clear statement of whether you wish your agent to have these powers.

Gifts are an important tool for many estate plans, and your attorney-in-fact can make gifts on your behalf, subject to guidelines that you set forth in your Power of Attorney. For example, you may wish to permit your attorney-in-fact to make "annual exclusion" gifts (currently up to $10,000 in value per recipient per year) on your behalf to your children and grandchildren. It is important that the lawyer who prepares your Power of Attorney draft the document in a way that does not expose your attorney-in-fact to unintended estate tax consequences. While some states permit attorneys-in-fact to make gifts as a matter of statute, others require explicit authorization in the Power of Attorney.