PODCAST 81: Why Do I Need a Power of Attorney?

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Below is a transcription of the Ask Gregory Podcast 81 – Why Do I Need a Power of Attorney?

Gregory Ricks  00:00

Hey welcome. I’m your host Gregory Ricks a financial advisor here to answer your questions and help you win with your money.

Podcast Intro / Outro  00:09

On today’s episode of the Ask Gregory podcast, we’re gonna answer the question, why should somebody have a power of attorney? Joining us for this week’s episode are Wes Blanchard of WJ Blanchard Law, and Nicholas Rohde, a wealth advisor here at Gregory Ricks & Associates. We do have a complimentary download waiting for you on this topic. If you go to gregoryricks.com/podcast81 again, that is gregoryricks.com/podcast81

Gregory Ricks  00:36

I want to talk about POA is power of attorney. And Nicholas, you can help me with this. Most people have qualified money.

Nicholas Rohde  00:46

Yeah, pretty much almost all their retirement assets. Yeah, money. Yeah.

Gregory Ricks  00:51

And I go back to you know, one of the most dangerous things we do every day it was we get in the car and go somewhere. And there’s wrecks all the time. And I’m of I was driving on the highway recently, and it was going through New Orleans, just headed up towards Mississippi. And it’s just like, Oh my God, there’s so many crazy drivers, people zooming through cutting between cars. And if they realized how cars don’t like to be bumped, and then you’re you bought somebody or you get bought, neither of you probably know how to handle that situation to get the car back stable, you’re going to overreact and then it’s probably going to be spinning or tumbling. And death could be coming. So or really bad injury from that. So we do those dangerous things. And And here’s where I’m going with that. What Where’s most of our money, it’s qualified money. You get put into a coma? Can your wife, Nicolas, go say, well, I need to turn on some income from that IRA, or because that 401k

Nicholas Rohde  02:07

Since my family has engaged us is firm. My wife can, yeah, because I have a power of attorney. But you don’t

Gregory Ricks  02:07

if you don’t have that. What can you do?

Nicholas Rohde  02:07

You’re in trouble.

Gregory Ricks  02:09

Now? What? How does the wife get access? If you don’t have documents that gives her the right in certain situations? You have to die?

Nicholas Rohde  02:26

Yeah

Gregory Ricks  02:27

Right there. So that’s where, and even if it’s just you, and you know, prior to death is somebody needing to help you and handle things. So I come back to the power of attorney. So tell us about that document, and how that can help in those situations that come up, where we might not have the capacity, but we’re still alive. But But stuff might be done with our qualified money like IRAs, 401 K’s 403 B’s Roth money, that’s all qualified accounts.

Wes Blanchard  03:03

Sure. So the best way to look at a power of attorney is more or less a contingency plan for the unexpected. You’re still around maybe briefly incapacitated, maybe longer. Maybe Maybe you have, you know, not in a car accident, maybe you have early onset dementia. Maybe you have Alzheimer’s, things that sort of come and go and you have moments where you’re lucid, and you can make your own decisions. But for the most part, you really you really can’t be trusted, you know, for the long term. And what this document does is it it it contemplates that exact situation by allowing someone to step in and make those those decisions for you. So that’s that’s sort of the the gist of it. But as it applies, I think to to the work that we do together, right? It, it’s a seamless transition on the majority of your assets. Most of your money is going to be tied up in qualified money. We know after talking for years and years about how tight regulations are on these things, and how how focused custodians are on compliance and making sure that all of these dots line up. Before we grant access to money. Nick and I have been working on a case where we’ve got so much red tape, it’s I mean, for months, and it’s one thing after another after another and I look we’ve stuck with it, and we’re at the end of it, but the point there’s just underscore that they are serious about compliance and so having that power of attorney becomes a necessity. And you know, you have options to you know, we talk about the onset of an event, triggering that power of attorney and most are set up that way. They’re set up such that as long as you can make your own decisions you will. Others, however, are set up such that as soon as the ink is dry as soon as you signed Someone’s got that power of attorney. And there’s a big distinction there, right? Someone can go in, submit that document and work on your behalf right away. For some scenarios that’s appropriate. For some scenarios, that’s okay. For others, you definitely want to avoid that. So, you know, it’s worth a discussion to sit down and figure out which one’s right for you. But there’s really not much of a debate when you’re considering whether your assets are tied up in qualified money, whether you actually need the document at the end of the day, the answer is yes.

Gregory Ricks  05:36

I think everybody needs the document. I think it’s really important and some people might not understand to this effect. And we had, I was looking at a scenario not long ago, going back through notes of conversation that some body became unhappy with us. And it was a daughter of a client, basically unhappy because she wanted to handle and do stuff. And we wouldn’t talk to her about it, because she has no right to it. And we are under rules that we can’t violate. And the reason I mentioned that is because it would take a power of attorney, do it, whether it’s an active one or springing one, what’s the scenario, we need to see the document that gives you the right to do that? Couples may not understand this as well, like, wife come up? Yeah, you know. And they’re both aware of Fred’s money being with us. But she calls up says, you know, I’m a little uncomfortable with the risk. Now, I want to make some changes. But she can’t make changes, unless that’s already been authorized and agreed upon. And it might even take a POA to do so. So this is something we we do together now is when families come on board with us, one of the things we want to have done, and they might not have had done a will or done anything, but there’s a few that’s already done this, but one of the things is we part of people becoming clients with our firm, Gregory Rick’s and associates to total wealth authority, we’re gonna say, we got this, we’re going to get you set up with a power of attorney. And that’s what you’re helping us with to just get that document done if they want to do other work that’s between you and them. But we we really want to get this handled to solve that those scenarios I mentioned and more your thoughts?

Wes Blanchard  07:45

Yeah, I think that that’s the best way to approach it. You know, attorneys, oftentimes, I least see it this way, we’re either solving problems after they’ve happened, or we’re preventing them from arising. And in this case, we’re doing the latter, right, we are game planning ahead of what could potentially be a real significant issue. Having money that’s tied up that’s frozen, simply because someone has lost their capacity can be devastating. Especially if it’s if it’s actively managed money, think about money that needs to come out of the market, or that needs to go in, right, or that just needs to be shifted, so that it’s better used for the long term benefit of the client. So you know, you’re hitting on all the right marks, right, you have to come in and understand that if we’re all going to be in this together, and we’re trying to put out the best product, the best service for everyone here. This is going to enable us to put our best foot forward to give us the best shot no matter what the circumstances.

Gregory Ricks  08:49

Yeah, I think it’s really important that is game planning ahead of time. And it also gets people to understand the landscape that we have to operate in. And if these things come up, or somebody comes unhappy, Kozik can’t dig into their mom’s situation, or the spouse wants to make changes. Well, we’re going to have clarity on how all that works, because there’s a document that addresses that, but I’m also worried about that emergency were like oh my gosh, we can’t get to the money that we need in this situation. So we’re going to help there and give clarity which leads on to other conversations that hopefully encourages them to get other things documented.

Disclisure  09:34

Thanks, everyone for tuning into this week’s episode of the Ask Gregory Podcast. We love to give a big thanks to our guests Nicholas Rohde and Wes Blanchard for joining us on this week’s episode of the podcast and don’t forget we’ve got a complimentary download waiting for you on this topic. If you go to gregoryricks.com/podcast81. Again that is gregoryricks.com/podcast81

Gregory Ricks  09:55

Yeah, if you’re needing help on something like investment planning, estate planning, the guided planning system that we will use, income planning, just start with a 15 minute conversation (504) 832-9200,  gregoryricks.com

Disclosure  10:10

Gregory Ricks & Associates is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Gregory Ricks & Associates are not affiliated companies. Gregory Ricks & Associates, The Total Wealth Authority is our trademarked tagline, it does not promise or guarantee investment results or preservation of principal nor does it represent a certain level of skill. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. This radio show is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Gregory Ricks & Associates is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Gregory Ricks & Associates. Any media logos and/or trademarks contained herein are the property of their respective owners and no endorsement by those owners of Gregory Ricks & Associates is stated or implied Gregory Ricks & Associates has a strategic partnership with tax professionals and attorneys who can provide tax and/or legal advice. AEWM, Gregory Ricks & Associates, WJ Blanchard Law, LLC, J Heath & Co. and Mortgage Gumbo are not affiliated companies. This show is a paid placement.