When thinking about the person to appoint as your power of attorney agent, remember that this is one of the most powerful authorities that can be granted to someone if you choose to allow them to give your property away to others.
Why Grant Gift Making Powers?
There are a few different reasons why you might work with your estate planning attorney to allow your agent to have gift making powers. For example, perhaps you want holiday and birthday presents to be provided to your loved ones as you normally would or want to continue or begin making charitable donations on your behalf.
The Importance of Choosing the Right Agent
Making gifts can also help to minimize estate taxes and to improve your eligibility for Medicaid. But giving an agent the opportunity to make gifts under your financial authority gives them tremendous control over your estate. Choosing the right person to help you as your agent is crucial since you’re placing a lot of trust in this individual with gifting powers.
Financial fraud or abuse may occur if you have decided with the help of your estate planning lawyer that you want to give your power of attorney agent this authority, consider placing limits on it.
For example, you might name whether the agent is eligible to make gifts to themselves or put a list of people or organizations they’re eligible to give gifts too. You can also choose to go as far as identifying the total value of gifts that an agent is allowed to make in one year. If you do not place a maximum amount or cap on what gifts an agent can make in a year, this could generate tax consequences in addition to diminishing the overall value of your estate.
Discussing Your Options with an Estate Planning Lawyer
When creating an estate plan, discuss all of the options as well as the risks and benefits with your estate planning lawyer in MA.
