A power of attorney is another element you should consider when devising a comprehensive and responsive estate plan. Many people assume a power of attorney is for the elderly or the sick, but it is actually an important legal instrument that can benefit just about anyone apart from persons under the age of 18.
In Indiana, if you want to authorize another person to have Power of Attorney for the purpose of state taxes, then you need a Power of Attorney Form (POA-1) completed and properly submitted to the Department of Revenue (DOR). A DOR-1 is not complex. The process to submit the form is also not complex. But knowing all of your rights and making sure all of your concerns and questions are addressed so that the POA-1 you do submit works to your benefit can be complicated.
At Guy DiMartino Law, we believe in the informed client. We want you to know your rights and all the advantages and disadvantages of any element of your estate plan. We know from experience that informed clients make better decisions for themselves, so we are here to help. Below is a brief overview of powers of attorney in Indiana, and if you still have questions, contact our office to get the answers you need.
Why should you have a Power of Attorney in Indiana?
Power of attorney is a way you can rest assured your finances –whether personal or business-related – are taken care of according to your wishes when you are away or otherwise incapacitated by disease or illness and, therefore, cannot manage your financial affairs yourself.
In other words, you use a Power of Attorney document when/if:
- You become ill;
- You are diagnosed with a terminal or incurable disease or condition;
- You want to ensure someone has been appointed to manage your finances if something unexpected happens;
- You will be away for a while; and/or
- You simply do not want to manage your finances yourself.
There are different types of Powers of Attorney that may be used for different purposes, like those purposes listed above. POA types include:
- Durable Power of Attorney – this type of Power of Attorney can be general or limited in nature but is necessary if someone is to represent you when you become incapacitated.
- Springing Power of Attorney – this type of Power of Attorney is similar to a durable one but only becomes effective upon incapacitation, thus, defining what you mean by incapacitated is very important.
- Limited Power of Attorney – this type of Power of Attorney is designated as such for a limited purpose and/or a limited time period, e.g. when you know you will be away and need someone to sign a legal document on your behalf and in your absence.
- General Power of Attorney – this type of Power of Attorney is comprehensive and gives all the same rights you have for yourself to your representative, e.g., a general POA can sign your checks, pay your bills, and conduct other financial tasks on your behalf if you prefer it.
What does a Power of Attorney do?
The capabilities of a Power of Attorney are already somewhat outlined above, but typically speaking, a POA can:
- conduct your financial matters, like:
- file your taxes,
- pay your bills,
- sign your checks,
- collect social security, and
- manage investments; and/or
- act on your behalf with third parties, like:
- dispute credit card purchases or payments with credit card companies,
- sign legal documents (e.g., signing a purchase agreement to buy a house), and
- conduct matters with utilities or other entities.
How to determine who to pick as your Power of Attorney?
You can choose anyone to be your Power of Attorney – it can be a friend, a family member, a business associate, or another person. The only requirement in Indiana is that the person you choose is older than 18 years.
There are two important considerations you may want to make when choosing your POA:
- that you wholeheartedly trust the individual; and
- that the individual knows the ins and outs of your personal and/or professional financial matters.
The appointment is not for everyone, so be sure to check with the person first before designating him or her as your POA. Depending on your circumstances, you can also think about appointing co-agents – so you could have more than one POA and each would have specific duties or responsibilities assigned to him or her.
In Indiana, can you change who your Power of Attorney is?
You can change your POA whenever you want so long as you are of sound mind and body. To revoke a current POA, you need to submit an Indiana Power of Attorney Revocation Form. Then you must:
- alert the agent that you are revoking him or her as such, and
- inform any institutions that rely on your POA to conduct personal or professional business on your behalf.
To note, if you do not inform the institution relying on the agent, then the institution cannot be held liable for any consequences resulting from their continued reliance on the former POA.
Common reasons to change a Power of Attorney include:
- your trust in the POA has changed;
- the POA dies; or
- you want to change what "power" the POA has or what the POA does on your behalf.
Contact an Estate Planning Attorney in Michigan City to Help You Understand Powers of Attorney Today
At Guy DiMartino Law, we are committed to our clients. We want you to have a comprehensive estate plan that meets your goals and benefits you in all possible ways.
Contact us today to help you with your Power of Attorney form or to help you prepare for the unexpected by helping you create a holistic estate plan.