A durable financial power of attorney is a simple document helping you to plan ahead for someone to manage your affairs should you become incapacitated or unable to make your own sound decisions. This document is a good idea if you want to help your loved ones avoid the delay, hassle, and expense associated with court proceedings to determine their right to manage your interests. The financial power of attorney typically takes effect as soon as you sign it. You can also create a ‘springing durable power of attorney,’ which prevents your POA from becoming effective until a doctor declares you incapacitated.
You must choose an agent you can trust, as the job of the person holding the POA carries heavy responsibility. They have the right and obligation to manage your finances, property, and personal matters, making major decisions that can have some a major impact on your life and assets.
Your financial power of attorney must be specified as durable; otherwise, a court can revoke the POA when you become incapacitated. A durable financial POA ends when you die. You cannot use this document to designate the same agent to handle your affairs after your death. This does not mean you cannot name them as the executor of your estate. You will simply have to take further measures to do so. The POA also ends if you revoke it, you divorce, the court invalidates the POA, or no agent is available. Because of this, it is a smart estate planning move to keep your document valid and current, and to make additional provisions to avoid the invalidation of your financial power of attorney.
- When Should You Use a Trust Instead of a Will? - September 23, 2021
- These Estate Planning Myths Can Lead You in the Wrong Direction - September 9, 2021
- Vacation Home Owners: Be Aware of Ancillary Probate - September 2, 2021