A Financial Power of Attorney gives someone else the power to act on your behalf regarding financial or legal matters. The benefit is that your agent can handle your assets if you are unable to do so, without the extra time and expense of a conservatorship proceeding.
When You Can Use a Financial Power of Attorney
The most important reason to do a Financial Power of Attorney is for when you truly cannot handle your own finances, such as banking
- For when you are incapacitated and need someone else to handle your finances.
Incapacity means you don’t have the mental ability to do these things for yourself. A common long-term use example is if you have dementia or Alzheimer’s.
Even though the main purpose is to help in case of incapacity, it’s effective continuously after you sign it so many people use them for convenience. Some examples:
- For when you’re traveling
- For when you’re in the hospital, but have mental capacity, and it’s simply more convenient for your agent to handle routine financial matters like going to the bank.
Like the Health Care Directive, this for use during lifetime so it is “incapacity planning” rather than “estate planning.” But I offer it as part of the estate planning package because it is convenient for you to do it with your other legal documents.