A power of attorney is a legal document that lets you give another person authority to manage your affairs. More specifically, a power of attorney for finances or financial power of attorney grants someone else, your “agent” or “attorney-in-fact,” the power to act on your behalf in financial matters. The term “durable” means the document stays valid even if you become incapacitated. Without it, no one automatically has the authority to handle your finances, even if you are married or have adult children.
How a Durable Power of Attorney Differs from Other Types of Powers of Attorney
A durable power of attorney differs from other powers of attorney because it remains effective if you become incapacitated. In contrast, a “general” power of attorney ends when you lose the ability to make decisions. A “springing” power of attorney only takes effect after a specific event, such as a medical diagnosis of incapacity.
A durable power of attorney may start immediately or upon a future event. The durable language in a power of attorney document provides long-term security and reliability for managing your financial needs.
Key Reasons to Create a Durable Power of Attorney for Finances
Creating a financial power of attorney gives you control over who manages your money if you cannot do so yourself. This avoids the need to establish a court-appointed conservatorship, which can be an expensive and time-consuming process. It also prevents delays in paying bills or managing assets during emergencies. Finally, a durable power of attorney protects your loved ones from financial stress by documenting clear instructions on how to manage your accounts, investments, and other financial matters.
Responsibilities and Powers of the Agent
The agent under a durable power of attorney for finances has numerous significant powers and responsibilities. They have the authority to manage your financial affairs, including paying bills, managing accounts, and making investments. They are responsible for acting in your best interests and following any instructions in the document. A power of attorney can take effect immediately after you sign it or only if you become incapacitated, depending on your choice. When acting as your agent, your chosen representative must keep accurate records, avoid conflicts of interest, and handle your money responsibly. You can revoke their authority at any time as long as you have the legal capacity to do so.
Common Financial Tasks Agents Handle
Agents under a financial power of attorney can manage a wide range of tasks. For instance, they might pay utility bills, mortgages, and other expenses to keep your finances running smoothly. They can oversee bank accounts, transfer funds, and write checks. Agents can also manage retirement accounts, handle insurance claims, and file taxes. If you own investments, the agent can buy, sell, or adjust your portfolio as needed. They can even handle property transactions, such as selling a home or managing rental properties.
How a Lawyer Can Help in Drafting a Durable Power of Attorney
An estate planning lawyer can help you draft a financial power of attorney that meets your needs and complies with state laws. They can explain the document’s function and help you choose the right agent to manage your finances. They can also ensure the document clearly outlines your agent’s powers and any limits you want to set. Your lawyer can address your specific concerns, such as protecting assets or avoiding misuse of authority. Lawyers can also verify that the power of attorney integrates thoroughly with your estate plan.
Contact Our Southeastern Massachusetts Estate Planning Attorney Now
Take control of your financial future today. Contact Surprenant & Beneski, P.C. to arrange your initial consultation. Our team will guide you through the process of creating a durable power of attorney for finances that fits your needs and clearly expresses your wishes.
