The person you name in a durable financial power of attorney as your “attorney-in-fact” will have the power to make different financial decisions — and carry out various financial tasks — on your behalf. The attorney-in-fact, however, will only gain these powers in the event of your incapacitation — i.e., when you become unable to carry out these tasks for yourself due to medical reasons.
When creating a power of attorney, you will bestow these powers upon the attorney-in fact via a document that you execute before appropriate witnesses.
You have the authority to decide what “powers” your attorney-in-fact will have
Durable financial powers of attorney are flexible documents that you can draft in accordance with your particular needs. In fact, you can grant as much power or as little power as you wish.
When drafting your power of attorney, for example, you may want to grant your attorney-in-fact the following powers to:
- Pay your outstanding bills.
- Pay your outstanding taxes.
- Pay any of your current or ongoing medical expenses.
- Manage the upkeep and maintenance of your real estate holdings.
- Make decisions regarding your financial and investment accounts.
- Collect and use your retirement benefits for your care, support and to maintain your estate.
- Transferring your assets or liquidating them.
- Running your business.
- Buying or paying for your insurance.
- Hiring a professional to represent you in different circumstances.
In carrying out the above — and any other named tasks on your behalf — your attorney-in-fact must at all times act in accordance with your best interests.
One important thing to consider, in addition to establishing a financial power of attorney, you may also want to establish a medical agent, who can make decisions relating to your medical affairs. In the best of worlds, your financial power of attorney will be the same person as your medical agent — so that you don’t need to worry about the two agents coming into conflict with one another. However, this is not always possible.
Are you ready to create your power of attorney?
A durable financial power of attorney is the kind of document that is best to set up now rather than later. The longer you wait, the more chances are that you could become incapacitated without having a plan for who will take care of you. If this happens, your family members may have to scramble to gain the appropriate authority to make vital decisions on your behalf.