Using a POA to ensure a child is supported
- Explaining that a POA cannot be used for anything after your death, referring to previous columns that provide estate planning solutions, and explaining that ongoing financial support to a vulnerable child while you’re alive requires specific POA clauses if that support is to continue after you lose cognitive capacity to handle your own affairs.
“Can I write a letter and sign it with a witness – to give to my Power of Attorney to arrange a monthly amount to a child, after I die, and not a lump sum of money?”
Thank you, Sandra, for that excellent question.
I will answer it.
But first, please tolerate a quick lingo lesson about powers of attorney.
A power of attorney (which I’ll shorten to “POA”) is a document, not a person.
The POA document is used to appoint a representative to handle financial matters on your behalf.
When answering Sandra’s question, I am going to refer to the document as her POA.
POA documents refer to your appointed representative as your “attorney”, but that’s confusing because folks commonly use that word to refer to lawyers. So, I will use the word “representative”.
Now to answer Sandra’s question.
The authority you grant to your representative in your POA is effective only while you are alive.
It stops having legal effect on your death.
Therefore, the answer to Sandra’s question is a resounding “no”. Her representative by POA lacks authority to do anything on her behalf after her death, let alone structure her child’s inheritance as a monthly amount rather than a lump sum.
Sandra can achieve that structure for her child, though.
She is one of many parents who believe their child would benefit from receiving their inheritance by way of a monthly payment instead of a lump sum.
One context where this arises is with a drug addicted child. A lump sum might cause harm by fueling the addiction and be quickly squandered.
There are other contexts, ranging from a recognized cognitive disability to a child who has simply proven themself to be a poor money manager.
I used the drug addiction context in a two-column series in late fall, 2025, offering two options for achieving the goal. If you have difficulty finding the columns, e-mail me and I’ll send you the links.
Briefly:
- One option is by directing, in your will, that your executor purchase an annuity with the child’s share of your estate. The annuity must have iron clad conditions to prevent the child from collapsing the annuity to receive a lump sum.
- Another is by having your will appoint a trustee to manage the child’s inheritance. This provides for flexibility but also requires the involvement of someone to act as trustee.
There are other options as well. Consult with an estate planning lawyer to learn about all of your options so that you can choose what’s optimum for you and your child.
The story doesn’t end there.
Sandra’s representative by POA might well have a role to play when it comes to financial support for her vulnerable child.
Sandra has been providing financial help to her child, here and there, over the course of her child’s life.
Excellent that she’s asking about how to continue providing effective financial help for her child after her death.
But what about the gap in time that might arise if Sandra loses the cognitive capacity to manage her own affairs at some point before her death?
Will her representative by POA have the authority to continue providing financial support to her child on her behalf?
It depends on the POA document.
Sandra’s POA is likely “enduring”, meaning that her representative will continue having authority after Sandra no longer has cognitive capacity.
Likely, because the main reason people make POAs is so that someone can take over managing their financial affairs after they lose the capacity to do so themselves.
But it’s unlikely that Sandra’s POA includes clauses that authorize ongoing financial support to her child.
Pursuant to section 3 of BC’s Power of Attorney Regulation, “…the total value of all gifts, loans and charitable gifts made by an attorney in a year must not be more than the lesser of 10% of the adult’s taxable income for the previous year and $5,000.00”.
That maximum applies unless the POA contains a clause that specifically authorizes the representative to make gifts that exceed that maximum.
Without that clause, Sandra’s appointed representative by POA will be handcuffed from providing anything more than $5,000.00 per year of support to her child on her behalf.
This is an important issue for anyone who wants their representative by POA to be able to continue financially supporting a charity, grandchildren, or anyone else on their behalf.
