Have You Prepared Your Power of Attorney Document?
It's very important to have in place, a Durable General Power of Attorney for financial transactions in the event you become incapacitated. Many families are now assisting their aging parents in finding ways to pay for in-home care. A natural place to look for the money to pay for home care is home equity. An excellent tool to tap into that equity is a reverse mortgage. But if the aging parent is not of sound mind and cannot make financial decisions on their own, a previously executed power of attorney will allow a trusted person to make decisions on their behalf and contract for them on the reverse mortgage, completing the counseling, signing the reverse mortgage application and final loan documents.
When using a power of attorney document in the reverse mortgage transaction, one must present a current doctor's letter stating something to the affect that the elderly homeowner is unable to make decisions for him or herself, and the doctor must also state the date or time period the incapacity took place. This is to assure the person was competent at the time he or she executed the power of attorney document. Often, the POA is used in conjunction with a living trust. You should also renew the POA every few years. Be sure to save the original notarized copy of power of attorney document as it must be recorded at the completion of the reverse mortgage transaction.