Gifts under a Power of Attorney During Recession – Overview

Gifts under a Power of Attorney During Recession – Overview

By: Martin M. Shenkman, CPA, MBA, JD

Gifts under Power of Attorney During a Recession.

  • 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 so.
  • 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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