Gifts under a Power of Attorney During Recession – Overview
By: Martin M. Shenkman, CPA, MBA, JD
Gifts under Power of Attorney During aRecession.
Power of Attorney=Legal document in which you
designate a person, called "agent", to handle legal, tax and financial
matters for you.
Why a gift provision is important. If you don't
expressly authorize an agent to make gifts in your power they cannot do
How the economic downturn affects this. Almost every
family has someone in need because of the recession. Everyone's assets have
been affected so your ability to make gifts may have been impacted.
Why you need to review your power now. How much help,
to whom and for what uses? Updating your power is a simple way to also
clarify in your mind what you are able and willing to do.
Equalization. Most powers and estate plans (e.g.
wills) ignore this. If you give your son $10,000 to help pay his past due
mortgage, must you give your daughter who has not been laid off $10,000?
Perhaps you might help the child who needs it now and adjust your will to
equalize later. Is "equal" equitable?
Most form powers ONLY permit the agent to pay for
your needs (you're called the grantor). Consider including a clause
authorizing the agent to pay to help maintain the living needs of anyone
you feel responsible for.
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