Ask the Experts: Is there a cheap way to transfer power of attorney?

Ailing relatives, wedding gifts, underwater mortgages. This week, the money questions from sacbee.com readers are all over the financial map.

Walt Romatowski, a certified financial planner in Roseville, offers answers as one of our "Ask the Experts" contributors. To see more of his advice or that of our other local experts on taxes, investing, jobs or wills/trusts, go to: www.sacbee.com/personalfinanceblog.

My brother's wife has a mild Alzheimer's condition and is unable to handle any financial transactions. My brother is in poor health and fears if he has a stroke, etc., he will be unable to handle control of their finances. Would a "financial directive" purchased at a stationery store giving me power of attorney be legal or would it be better for him to do a living trust or will? My brother has a large estate and numerous bank CDs. What is the reality if he has a stroke or heart attack and both of them are unable to process any financial transactions? Thank you.

Using online services or buying generic forms from a stationery store may be fine for an uncomplicated situation. But since your brother has a "large" estate and "numerous" CDs, I recommend that you seek professional help from an estate planning attorney.

To find an estate planning attorney in your area, ask for a recommendation from family, friends, business associates, or your accountant or financial adviser. Your local probate court or state bar association also can be a source of referrals.

This area of law can be complicated. Trying to save a few bucks could be an expensive mistake.

My house is about $25,000 underwater and I cannot refinance because I have already taken a government-assisted loan. To pay off my mortgage early, I am making one extra payment a year so my son will have a place to live when I die (I am 71).

I have a 30-year loan with about 24 years to go. Is it a good idea to make an extra payment when your house is underwater?

I don't have the specifics of your mortgage rate and the amount owed but, in general, making an extra mortgage payment each year can significantly reduce the time it will take to pay off your mortgage.

It appears that you plan to stay in your home and would like your son to inherit it, so I see no problem with continuing to make the extra mortgage payment each year.

For a wedding gift, I want to give my daughter and her fiancé a nest egg of about $10,000. They are both 30, college-educated, with modest combined earnings of about $50,000. They have no debt and plan to have children in about three years. They are responsible about money but have no investment experience. What form should the nest egg take: CDs? A seeded mutual fund investment account? Other?

Gifting a $10,000 nest egg to your daughter and her fiancé as a wedding present is a great idea. Not only does it give them a jump-start on savings, but it also provides an opportunity for some financial education.

If they need the funds to help buy a home in the near future or to build their emergency fund, the money should be held in a safe, liquid savings or money-market account or in CDs.

Money slated for retirement should be invested in no-load, low-cost mutual funds or exchange-traded funds (ETFs) that track the main indexes, e.g., S&P 500 (large companies), Russell 2000 (small companies), MSCI EAFE (international companies) & the Barclays Capital Aggregate (bonds).

In addition, you might want to add a subscription to Money magazine or Kiplinger's Personal Finance magazine. Both are great resources for learning about investing and personal finances.

– Compiled by Claudia Buck

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