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.

“I want to make sure my loved ones can handle routine banking or pay my mortgage in case of emergency.”

What Can You Do With a Financial Power of Attorney?

Examples of what this document allows your agent to do:

  • Routine banking such as depositing checks, transferring money.
  • Write checks.
  • Open and close accounts.
  • Real estate transactions, such as buying or selling a house or other property.
  • Choose investments.

Power of Attorney vs. Personal Representative

I sometimes get people asking me for Financial Power of Attorney to name someone to settle their financial affairs after your death, but this is confusing it with a Personal Representative under a Will. The two roles don’t overlap in time. The Power of Attorney is a lifetime power that expires at death. A Personal Representative is only after death.

Do You Need Help Setting Up a Financial Power of Attorney? Call Me.

Do you have a power of attorney that you want to update? Do you need a new power of attorney? Contact me today to discuss your situation and we’ll get you set up with the documents you need.

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