What’s the role of a financial power of attorney?

On Behalf of | Apr 26, 2024 | Estate Planning |

People who are creating an estate plan shouldn’t become so focused on passing down assets to their beneficiaries that they forget other consequential estate planning issues. One of these involves setting up plans that will go into effect in the event of medical incapacitation.

If you’re creating your estate plan, one of the most important end-of-life care plans you can set up has to do with your finances. Making one specific effort can help to ensure that your finances don’t suffer if you’re unable to manage them due to injury, illness, advanced age, or other limited circumstances.

Why should you set up a financial power of attorney?

Establishing a financial power of attorney can protect your assets so you can pass down as much as possible to your loved ones. The person you name will make all the decisions related to your finances if you become incapacitated. This gives the individual the ability to care for investments, buy and sell assets and manage financial accounts. They can do anything that you’d normally handle, so it’s a good idea to discuss these matters with them while you’re still able to do so.

Who should you name as financial power of attorney?

The person you name in your financial power of attorney must have good financial sense. They must be able to put their own wishes aside so they can make decisions that are based on your estate’s best interests. Ideally, they’ll live close to you so they can step in right away if something happens to you.

When does a financial power of attorney end?

A financial power of attorney goes into effect if you become incapacitated. It’s effective until you cancel it or you pass away. When you pass away, the duties related to your finances will transfer to the estate executor you named in your estate plan.

Making sure you have everything in order can help to provide you with peace of mind and give your loved ones clear instructions about how to handle your affairs. Working with a legal representative to get everything in order may help to reduce your stress and better ensure that you have a legally valid estate plan in place at all times.