What Kind of Power of Attorney is Right for Me?
The question is not if you should have a Power of Attorney; rather, it is what kind of Power of Attorney should you have. You guessed it – it depends. Generally speaking, however, for the purposes of estate planning, you want to be sure that you have designated someone to take care of your financial matters for you if you become incapacitated. Do not assume that your spouse automatically has this authority; they do not.
When creating a Power of Attorney, you need to ask yourself some important questions:
Who can I trust to handle my financial affairs if I am not able to handle them for myself?
Does that person have a general understanding of accounting, budgeting, paying bills, taxes, etc?
Do I want that person to have authority now or only if I become incapacitated?
Do I want the power to terminate if I become incapacitated or continue? (The power will automatically terminate at death.)
Do I want an accounting of the transactions that occurred? How often?
Do I want to allow gifting from my assets?
What powers do I want to convey? (Real estate transactions, business matters, securities and investment transactions, trust funding authority, beneficiary designations, insurance transactions, litigation, spousal and child support payments, bank statements and bill pay, digital property, etc.)
Are there legal documents that would conflict with the authority designated in my Power of Attorney document?
Do not let the multitude of options distract you; an experienced estate planning attorney can help you create the document that fits your needs. This is an essential piece of incapacity planning and can avoid the dreaded alternative – conservatorship.
A conservatorship is a legal proceeding whereby the court considers evidence of a person’s inability to handle their financial affairs. If the court appoints a conservator, the person subject to the conservatorship will need to pay court costs and conservatorship fees from his or her own assets. Additionally, accountings need to be filed on an annual basis as well as notices issued. This process is expensive, time consuming and quite intrusive into a person’s personal affairs.
Please do not let this happen to you. Contact us anytime with your questions about Powers of Attorney. We are happy to help.
