Have you given any thought to who will manage your finances in the event that you become incapacitated? While it’s easy to believe this will never happen to you, it’s best to plan for anything and everything that could go wrong in the future.
There is a lot to consider when creating a durable financial power of attorney, with one of the most important details being the person you grant legal authority. He or she is known as your agent, and may be faced with a variety of tasks and responsibilities in the future.
Here are some of the things your agent may need to do:
- Pay your bills, taxes and medical expenses
- Manage any real estate assets
- Manage your investment portfolio
- Access your financial accounts
- Collect retirement benefits on your behalf
- Operate your small business
- Purchase insurance on your behalf
- Transfer and sell assets as necessary
Many people shy away from creating a durable financial power of attorney because they believe that their agent will do whatever they want. This is not the case. Your agent must legally do whatever is in your best interest.
When does it begin?
If you are unable to make financial decisions on your own, such as the result of a serious illness, your durable financial power of attorney will kick into action.
However, if you make a recovery and are once again able to take over your finances, the power is now gone.
When creating a durable financial power of attorney you should learn more about when it begins, how it can end and any gray area that could cause confusion along the way.
Although it can be a challenge to create an estate plan, complete with a durable financial power of attorney, it’s something you need to do for peace of mind. Furthermore, it will go a long way in protecting both your family and finances in the event of your incapacitation.
A durable financial power of attorney is not something that everyone needs, but it could be a good addition to your estate plan. If nothing else, learn more about the process of creating a durable financial power of attorney and the benefits of doing so.