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What is a Financial Power of Attorney?
A financial power of attorney is a document in which you appoint someone else (your "attorney-in-fact," or "agent") to make decisions for you with respect to your assets when you are unavailable or unable to do so. When accidents, illnesses, or prolonged absences occur, you may need someone to manage your financial affairs. It can be done in anticipation of a future need, for a special purpose, or for a limited time.
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Why is a Power of Attorney Important?
Everyone should think about having a power of attorney. It allows you to pick someone you trust to handle your affairs if you cannot do so yourself. It gives you peace of mind, knowing that in an emergency someone you choose will have the ability to act for you. If you do not establish a financial power of attorney and you become incapacitated, it may be necessary for a court to appoint a guardian or conservator for you, and the court will appoint whoever it thinks best.
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Who Should I Choose as My Agent?
No one can tell you whom to choose as your agent. The person you choose needs to be someone you trust, as well as someone who can do the job. Many people select their spouse as their first choice, and a child or other relative as alternates. But, if your spouse is ill, inexperienced in financial matters, or for some other reason wouldn't be able to handle the responsibilities, select someone else.
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Can I Still Manage My Own Affairs If I Sign a Power of Attorney?
A financial power of attorney only becomes effective when you say it will. You can make the document effective either immediately or only when you become incapacitated. If it is effective only when you are incapacitated, even though you sign it now, you remain fully in control of your finances and your agent has no authority to do anything until incapacity occurs (if ever). As long as you are capable of making decisions, you remain in control.
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Can I Revoke a Financial Power of Attorney After I Sign It?
Yes. You can cancel, or revoke, a power of attorney at any time by tearing it up, signing a new one, or writing that you want to cancel it. If you do cancel, it's a good idea to let your agent and anyone your agent has been dealing with know that you have revoked the agent's authority.
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What is a General Durable Power of Attorney?
A general power of attorney is one that relates to your finances and assets or property. A durable power of attorney is one that remains effective even after you become incapacitated. The financial power of attorney we provide you with both applies to your general finances and assets and remains effective after incapacity, so it is in fact a general durable power of attorney.
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What is my Agent Authorized to do?
- To pay your bills, deposit checks, and deal with banks on your behalf
- To sell, manage, or reinvest your property
- To sign contracts, borrow money, or change investments on your behalf
- To pursue insurance claims and legal actions to enforce your rights
- To file tax returns, obtain insurance coverage, or apply for government benefits for you
- To transfer property to your living trust, if you have one
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Is There Anything My Agent Cannot Do?
Yes. Your agent cannot engage in any transaction for his or her own benefit. Further, your agent cannot:
- sign, amend or revoke your last will
- exercise any rights over a life insurance policy you have on the agent's life
- amend any trust you have created
- exercise any powers which would cause your assets to be taxable to the agent
- exercise any power of appointment given to you in someone else's will
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Will My Agent Be Paid for Acting on My Behalf?
No. Your agent must serve without compensation - it is a volunteer position. Further, an agent must keep your money separate from his/her own. He or she must not personally be involved in or stand to profit by any transaction where he/she represents your interests. He/she must keep separate and accurate records regarding all transactions he/she engages in for your benefit.
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Is my Power of Attorney Effective After my Death?
No. A power of attorney terminates upon your death. Thereafter your last will, living trust, or the law of intestacy, handles the distribution of your estate. A power of attorney document is not a substitute for a last will.
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What Is The Difference Between a Financial Power of Attorney and a Health Care Power of Attorney?
A financial power of attorney is designed to authorize someone to act on your behalf in matters relating to your finances, assets and property. A health care power of attorney is designed to authorize someone to act on your behalf to make decisions about your health care and medical treatment.
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