Financial Power of Attorney
By: LawInfo
Published: 11/2009
What will happen to your personal finances if you become sick or injured and you are unable to manage your own financial affairs? How will your bills be paid on time so that your credit score remains solid and your home doesn’t go into foreclosure? How will your checks be deposited and your investments managed? If you are incapacitated and you lack a durable power of attorney then the answers to these questions may be very difficult. Your friends and family may be trapped and unable to provide you with the help that you need. For your own current peace of mind and future financial well being it is, therefore, important to create a financial power of attorney.
What is a Financial Power of Attorney?
A durable power of attorney, also known as a financial power of attorney, is a legal document that names a person who can act as an agent on your behalf should you become incapacitated. A durable power of attorney takes effect immediately upon legal execution of the document and remains in effect until it is affirmatively revoked, a new durable power of attorney is executed or you die. For this reason, it is important that your financial power of attorney be a durable power of attorney so that it remains in effect indefinitely and in the case of your incapacitation.
You can name anyone to be your financial power of attorney. It is important to name a subsequent power of attorney in the event that your primary financial power of attorney is unable to fulfill his or her duties. For example, many married couples name their spouse as their power of attorney. However, if you are in a car accident together and you are both incapacitated then your spouse will be unable to fulfill his or her responsibilities pursuant to your durable power of attorney. If you name a subsequent power of attorney, such as a friend or another relative, then you can ensure that your financial affairs will be taken care of while you and your spouse recover.
A financial power of attorney can take care of any financial matters that you specify in your power of attorney document. Many durable powers of attorney include the right to pay bills, pay taxes, buy and sell investments and real estate, manage retirement accounts and other financial duties.
How is a Financial Power of Attorney Appointed?
A financial power of attorney is appointed when you execute a power of attorney form according to your state law requirements. Forms are available for you to complete and execute in front of witnesses and / or a notary public as required in your state. Most durable powers of attorney can be completed in this manner. However, if you have any questions then you should seek the counsel of an estate planning attorney in your state.
If you do not have a financial power of attorney that is properly executed at the time that you become incapacitated then your relatives will need to go to court and ask a judge to appoint one of them as your power of attorney. That will inevitably result in a delay in managing your finances and may have more serious repercussions such as fighting among your relatives or the appointment of someone whom you would not like managing your financial affairs.
The best way to protect yourself and your family is to draft and execute a durable power of attorney as soon as possible so that the person whom you want to handle your finances will be legally able to do so, should the need arise.
Elder Law Sub-categories
| Elder Law | Elder Law Attorney |
