One important element of estate planning is preparing for situations where you might not be able to manage your own finances, either due to incapacity or because you are otherwise unavailable. In these scenarios, it’s crucial to ensure that things like mortgage payments and insurance bills continue to get paid and that your financial life doesn’t come to a standstill.
A power of attorney for your finances is the best way to prepare for this situation. This document will authorize an agent that you choose to step into your shoes and handle your finances according to your instructions.
The authority granted in a power of attorney can be as narrow or broad as its creator desires. A narrowly drafted power of attorney can be useful if you want to authorize someone to do something very specific in your absence, such as maintain a home. If you’re looking for someone to completely manage your finances in your absence, it’s best to grant them as much power as possible.
When you speak with an estate planning attorney, they will review your financial situation and discuss your wishes to determine the best way to draft this legal document.
A power of attorney can be written to be “durable,” meaning that it will continue to be in effect even if it’s creator becomes incapacitated. This document can also be written to be either “springing” or “immediate.”
A springing power of attorney only comes into effect when its creator becomes incapacitated. While this is useful in controlling who has access to your finances and when, it should be noted that when a power of attorney is drafted to be springing, it will require signoffs by medical professionals who will need to confirm that you are in fact incapacitated.
This extra step can sometimes cause delays in putting the document to work, which can in turn result in delays in attending to your finances. If you would prefer to avoid those delays, it would be best to have the document go into effect immediately.
The last important thing to consider when creating a power of attorney is who will be authorized as your agent. Depending on how your power of attorney is drafted, your agent may have full control over your finances, and thus should be someone that you completely trust and know to be capable of handling financial matters.
A power of attorney is a necessary part of any good estate plan and will ensure that your finances remain intact even in a situation where you are not there to manage them. An experienced attorney can create this document for you and make sure it legally reflects your wishes. At Rosenblum Law we’re here to guide you through this process step-by-step. Call us now for a free consultation.
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