A power of attorney (POA) is a legal document that allows a person to appoint an individual to help them manage their financial decisions. By naming someone as POA, it means that you give them complete authority to handle financial matters.
A POA could be recognised as a person that could deal with the Internal Revenue Service (IRS) and the State on tax matters of people who may need help to do so.
“Powers of attorney can be helpful to older people and others who want to choose a trusted person to act when they cannot,” reads the Consumer Financial Protection Bureau (CFPB) website.
“Creating a POA is a private way to appoint a substitute decision-maker and is relatively inexpensive, although it may involve help from a lawyer. If you don’t create a POA in advance, a friend or family member might have to go to court to have a guardian appointed – and that process can be lengthy, expensive, and very public.”
Can I manage my parents’ insurance benefits if I have power of attorney?
The US Treasury Department does not recognise power of attorney for dealing with federal payments such as Social Security or SSI payments. To be able to manage their parents’ benefits, an individual should be named as a representative payee by the Social Security Administration.
“We appoint a payee to receive the Social Security or SSI benefits for anyone who can’t manage or direct the management of his or her benefits,” reads the Social Security’s official website.
“A payee’s main duties are to use the benefits to pay for the current and future needs of the beneficiary, and properly save any benefits not needed to meet current needs. A payee must also keep records of expenses. When we request a report, a payee must provide an accounting to us of how he or she used or saved the benefits.”
This means that a representative payee is responsible managing the Social Security checks for essential needs, depositing leftover funds, keeping records and reporting changes to the Social Security Administration.