Financial Power of Attorney
A financial power of attorney allows you to appoint a person, called an agent, to manage your assets and property on your behalf in the case that you no long have the capacity to do so. You can give your agent as much or little control as you wish, depending on your needs. The financial power of attorney will take effect as soon as a doctor concludes that you are incapacitated. If you want the power of attorney to begin as soon as you sign the document, then you may stipulate that in the provisions.
Responsibilities of an Agent
You may want to give your agent full power over your finances, or you can specify his or her duties in the document. These may include any of the following:
- Handling mail
- Paying bills
- Collecting government benefits such as Social Security
- Filing and paying taxes
- Maintaining property and business
- Handling transactions
- Investing your assets
- Managing bank accounts and retirement funds
In all of these actions, your representative is supposed to act in your best interest. This means that your agent should keep his or her funds separate from yours and avoid any conflicts of interests. The individual should also act according to your wishes, not his or her own personal preference.
While they are handling your assets, the agent should keep a strict record of all transactions. If the court or our beneficiaries require an account, then the agent is required by law to provide it. It is important to note that your representative cannot legally change the beneficiaries of your assets.
If the court finds that an agent is not acting appropriately, then they may hold that individual liable for the breach of conduct. The agent will be held to the same standard as a prudent person, meaning that they should not take unnecessary risks with your assets, or no more than a prudent person would have done.
Drafting a Financial Power of Attorney
Most states have forms that you can fill out to create a legal power of attorney. The forms contain information such as your contact information and the contact information of your agent. It will also ask you to specify what powers you wish the agent to have. You may also need to include forms for your financial institutions. Review your financial power of attorney with an estate planning lawyer in your state to make sure that all the necessary information is included in the document.
Your financial power of attorney will automatically cease once you pass away. If you would like your agent's responsibilities to continue, then you must name that individual as your executor in your living trust or will. The powers will also stop if you revoke it while you are mentally able to do so or if you have named your spouse as your agent and you get a divorce.
In some cases, the court will invalidate your financial power of attorney if they believe that it is invalid. This may occur if someone disputes the document because you were not mentally stable or you made the document under duress.
To create your financial power of attorney, you may want to consider obtaining legal counsel from an experienced estate planning lawyer near you. By getting legal help, you can help ensure that your document will hold up when the time comes for it to come into effect.