Federal Benefit Advisory

For Better or Worse

This week, an interesting case wherein the federal employee, about to retire, wishes to set up income from her TSP Funds. Simple enough, except, for the following reasons:

  • 15 years ago, (I’ll call them Susan and Frank) built their own Power of Attorney from a kit purchased at a stationery store.
  • In the POA, Frank wanted assurance that he would not be cut out of a share of TSP in the event of withdrawal or transfer, so in addition to the TSP requirements of spousal signature, the POA also says Susan may not withdraw or transfer, under any conditions, without his written permission, negating the purpose and power of the POA. So, even the POA would not allow her to take money for any reason, under any conditions. It put a lock on top of the lock imposed by TSP.
  • A Court Order is the only means of releasing this money, however, the expressed permission of the POA doesn’t allow, as Frank cannot provide permission, he is incompetent. So, to release funds without his written permission is what he did not want to happen. His wishes, and hers, cannot be fulfilled.  This is called a conundrum.  A final court decision and court order are pending.

Lesson learned, DO NOT DO YOUR OWN WILL, POWER OF ATTORNEY, TRUSTS etc. I was told recently; the big fees attorneys are earning is fixing the problems people create with ‘Do-It-Yourself’ documents. A modest fee to an attorney will be well spent in the end.

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