Establishing Power Of Attorney For Fidelity Investments

A power of attorney (POA) is a binding legal document that grants a person (the agent or attorney-in-fact) the ability to act on behalf of the principal or account owner. This document is essential for every adult, especially in emergencies, as it allows the agent to make important decisions and handle the principal's affairs if they become incapacitated. Establishing a POA is a crucial step in ensuring that someone you trust can act on your behalf if you are unable to do so yourself. In this article, we will discuss the steps to establish a durable power of attorney for Fidelity Investments, ensuring your financial matters are in order.

Understand the implications of granting authority to an agent

When granting authority to an agent, you are giving them the power to make decisions on your behalf. This is a significant responsibility and it is important to understand the implications of this before proceeding.

Firstly, the agent will be able to act on your behalf in a range of matters, including financial and medical decisions. They will have the authority to manage your investments, buy and sell assets, access your bank accounts, and make deposits and withdrawals. They will also be able to make medical decisions for you, such as choosing your treatment and selecting your hospital. It is crucial that you trust your agent to make decisions that are in your best interests and that align with your wishes.

Secondly, the agent will have a fiduciary duty to act in your best interest in all financial matters. This means that they must put your interests above their own and avoid any conflicts of interest. This is an important safeguard to protect your finances and ensure your agent is acting responsibly.

Thirdly, the agent will have broad legal authority, and their actions can have long-term impacts on your life. For example, they may be able to sell your property or make investments that affect your financial future. It is important to choose an agent who is capable of handling these responsibilities and who you trust to make decisions that align with your values and goals.

Finally, granting authority to an agent can help you prepare for unexpected events. If you become ill, incapacitated, or are physically absent, your agent will be able to manage your affairs and ensure that your wishes are carried out. This can provide peace of mind and ensure that your best interests are protected, even when you are unable to act for yourself.

It is important to carefully consider the implications of granting authority to an agent and to seek legal advice if needed. The agent will have significant power and responsibility, so it is crucial to choose someone trustworthy and capable of acting in your best interest.

Ensure the correct forms are signed, notarised, and dated

To establish a durable power of attorney for Fidelity Investments, it is important to ensure that the correct forms are completed, signed, notarised, and dated. This process helps to protect your interests and ensures the legality and validity of the power of attorney. Here is a detailed guide to help you through the process:

Firstly, you need to determine if you are the account owner (principal) or the person who will act on behalf of the account owner (agent/attorney-in-fact). If you are the account owner, you will need to review and complete the Fidelity Durable POA form for your state. Make sure to select the correct form, as there are specific forms for different states, such as the "Fidelity Durable POA form All States" or the "Fidelity Durable POA form NY". Annuity customers should use the forms provided for them.

Once you have the correct form, it is crucial to ensure that it is properly signed, notarised, and dated. Both the account owner and the attorney-in-fact must sign the form in front of a notary. This step adds a layer of legal validation to the process. Additionally, the form must be signed by two witnesses. These signatures further authenticate the document and the intentions of the involved parties.

If you are the agent (attorney-in-fact), you will need to request to be added as an agent to the account. You can do this by certifying and uploading the POA document that grants you the authority to act on the account owner's behalf. If you have a Fidelity account, you can submit the request online or use the "Affidavit and Indemnification" form.

It is important to carefully review all the documents and understand the implications of granting power of attorney. Working with a legal professional or your Fidelity representative can provide clarity and ensure that all forms are completed correctly. Remember to allow time for processing, as it typically takes 3-5 business days for the request to be completed.

By following these steps and ensuring the correct forms are signed, notarised, and dated, you can establish a durable power of attorney for Fidelity Investments, protecting your interests and ensuring that your chosen agent can make decisions and act on your behalf when necessary.

Understand the different types of power of attorney

When establishing a durable power of attorney for Fidelity Investments, it's important to understand the different types of power of attorney (POA) available. A POA is a legal document that grants someone else, known as the agent or attorney-in-fact, the authority to act on your behalf. Here is an overview of the different types of POA:

Durable Power of Attorney

The first type is the durable power of attorney itself, which is effective as soon as the principal (the person granting the power) signs the document. This type of POA allows the agent to continue making decisions on behalf of the principal, even if they become incapacitated. It covers financial, legal, and other essential matters, ensuring continuity in managing the principal's affairs. This type of POA is ideal for individuals planning for future incapacity, as it provides peace of mind that their wishes will be carried out without court intervention.

Non-Durable Power of Attorney

In contrast, a non-durable power of attorney is designed for short-term use and limited durations. It automatically expires when the principal becomes incapacitated or upon the completion of a specific task. This type of POA is suitable for situations where someone needs to handle your affairs temporarily, such as during travel or hospitalization, or for specific financial or business transactions.

Medical Power of Attorney

A medical power of attorney grants the agent the authority to make healthcare decisions on behalf of the principal if they are unable to do so. This type of POA ensures that the principal's medical treatment aligns with their preferences and values. It includes access to medical records and the ability to consent to or refuse treatment.

General Power of Attorney

A general power of attorney grants the agent broad powers to act on the principal's behalf in a wide range of situations. It covers both financial and medical decisions, unless otherwise specified. This type of POA is useful when comprehensive authority is needed, especially when the principal is out of the country or otherwise incapacitated.

Limited Power of Attorney

On the other hand, a limited power of attorney grants the agent authority to perform specific acts or make decisions in particular situations. It can be used for real estate transactions, managing a business, or other specific tasks. This type of POA is ideal when the principal cannot manage certain commitments or health reasons.

Springing Power of Attorney

A springing power of attorney is unique in that it remains dormant until certain conditions are met, typically the principal's incapacitation. This type of POA offers control and privacy to the principal, as it only activates when specified conditions occur. However, it can be complex to implement and requires clear definitions and, sometimes, medical proof.

Pick a trusted person to act as your agent

Picking a trusted person to act as your agent is a crucial step in establishing a durable power of attorney for Fidelity Investments. This person, also known as the attorney-in-fact, will have the legal authority to act on your behalf and make important decisions if you become unable to do so due to illness, mental incapacity, or physical absence. Here are some key considerations when choosing your agent:

Start by considering people closest to you, such as family members or close friends, who you trust implicitly and have a good relationship with. It is essential to select someone who understands your values and wishes and is willing to act in your best interest at all times. Remember, this person will be making decisions on your behalf, so choose someone who respects your values and has a similar outlook on life.

Next, evaluate the potential agent's ability to handle the responsibilities that come with being your attorney-in-fact. It is a significant role that requires good judgement, organisation, and attention to detail. Ensure they have the capacity and willingness to take on these duties, which may include managing your finances, making medical decisions, or handling legal matters.

Consider choosing someone who is relatively close to your age or younger, as they are more likely to be able to fulfil the duties for a longer period. While you cannot predict the future, selecting someone who is likely to be around for the long term can provide stability and ensure that your wishes are carried out.

It is also essential to discuss your decision with your chosen agent to ensure they are comfortable and willing to take on the role. Explain the responsibilities and the potential impact on their lives, especially if they need to make time-sensitive decisions or handle complex matters. Their consent and understanding are crucial to ensuring a smooth process.

Finally, while not mandatory, it can be beneficial to seek legal advice or consult a trusted legal professional when establishing a durable power of attorney. They can guide you through the process, ensure all necessary documents are in order, and help you and your chosen agent understand the legal implications and responsibilities involved.

Work with a professional to navigate state-specific rules

When establishing a durable power of attorney for Fidelity Investments, it is important to work with a professional to navigate the specific rules and requirements of your state. While the basic concept of power of attorney is consistent across the country, each state has its own unique laws and regulations that must be followed to ensure the legality and effectiveness of the document.

Working with a professional, such as an estate planning attorney, can help you understand the specific requirements and options available to you in your state. For example, some states may require the power of attorney document to be notarized, while others may require the presence of witnesses. An experienced attorney will be able to guide you through the process, ensuring that all the necessary steps are taken and that your document complies with the laws of your state.

In addition to navigating state-specific rules, a professional can also help you tailor the power of attorney to your specific needs and circumstances. For example, you may want to consider the type of power of attorney that best suits your needs, such as a durable power of attorney, limited power of attorney, or springing power of attorney. Each type has its own advantages and limitations, and an attorney can help you understand which option is most appropriate for your situation.

Another important consideration is the selection of your agent, or attorney-in-fact. This is the person who will act on your behalf if you become incapacitated. Working with a professional can help you weigh the options and make an informed decision. For example, you may choose a spouse or domestic partner, a parent, or another trusted individual. It is also important to name a backup agent in case your first choice is unable to serve.

By working with a professional, you can ensure that your power of attorney is properly tailored to your state's laws and your personal needs. This will provide peace of mind and ensure that your wishes are carried out in the event that you become unable to make decisions for yourself.

Frequently asked questions