Planning Intermediate: Powers Of Attorney and Advance Medical Directives

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Which of the following statements is true?

A springing power of attorney requires a determination of your disability in order to take effect

A durable power of attorney takes effect upon signing and remains in effect if you become disabled

Both the above are true

None of the above are true

Both the above are true. The springing power of attorney doesn't take effect until you become disabled, while the durable power of attorney takes effect immediately.

Which of the following is true regarding advance medical directives?

Controversy can arise if you express wishes as to your medical care with which your surrogate disagrees

It is best to have your advance medical directive witnessed by close family members

Your advance medical directive should address what should be done or not done when death is imminent

Your advance medical directive should address what should be done or not done when death is imminent. The other choices are false.

Which of the following is an important power to grant your agent in your power of attorney?

The power to write your will if you become unable to do so

The power to handle tax matters and deal with the IRS

The broad power to use your accounts for any purpose, in the judgment of your agent

All the above

The power to handle tax matters and deal with the IRS. Your agent is not permitted to write your will, and should not have authority to use your accounts for any purpose that he or she wants.

Which of the following is true regarding your power of attorney?

Its primary purpose in estate planning is to delegate broad authority over personal financial affairs to your agent in case you become disabled or incompetent

A comprehensive POA is an adequate substitute for a will in simple situations

Both of the above

None of the above

Its primary purpose in estate planning is to delegate broad authority over personal financial affairs to your agent in case you become disabled or incompetent. A POA becomes invalid at death and is not a substitute for a will.

Because your retirement account is one of your more substantial assets, it is generally unwise to allow your agent authority to make decisions regarding it.

True

False

False. Precisely because managing retirement accounts is so important, it's a good idea to grant authority over them to a trusted agent.