There are many ways that you could end up unavailable to make crucial financial or health care choices for yourself or your family. If at that time you have not documented your wishes it can add stress to the situation, and you might not experience the outcome you had in mind.
Often a source of confusion when protecting what is yours is the legal logistics and when they apply during your lifetime or after you pass.
Here are three tools to protect what’s yours during your lifetime:
In today’s post we are going to cover the financial power of attorney.
A FINANCIAL POWER OF ATTORNEY
A financial power of attorney (POA) is a legal document authorizing someone (your “agent”) to make financial decisions on your behalf. This agent owes you a fiduciary level of care, which means any decisions they make for you must be based on what they believe to be in your best financial interests.
A POA applies while you are alive, but unavailable to act for yourself. You can structure it to:
- Begin immediately or upon a triggering event (such as a debilitating accident or illness)
- Remain in force during a finite time period or be ongoing
- Apply to all your financial matters, or only to specific transactions
During these circumstances a financial POA can be helpful:
- If you become incapacitated due to illness, injury or dementia.
- If you’re unable to be present for a financial transaction, such as if you’re traveling abroad or you’re otherwise preoccupied.
- If you’d simply like to make it convenient for someone else to be able to make financial decisions for you – such as your spouse or a trusted sibling (in general), your parents (if you’re heading off to college), or your adult children (if you’re aging).
- A POA is only your legal agent while you are alive; their authority ends the moment you pass away.
- Your agent should have access to the documents that describe the POA you’ve granted them. If they can’t prove what their role is, they may not be able to act on it when needed.
- Some banks and account custodians have their own POA forms they would prefer you use; also, they may be wary of POA paperwork that is several years old. Check with the financial institutions you frequent about their policies, and consider annually reestablishing any durable POAs, to ensure they remain relevant.
- You cannot grant a POA if you are deemed to be of unsound mind. This makes sense, since you may inadvertently name a “bad” agent … or others may be able to contest the POA you’ve established.
Establishing a POA can be a crucial tool when protecting what’s yours. We hope that this information provides you with some clarity as you plan. We can help put you in touch with select professionals to assist with legal aspects – or we ourselves can help you sort through the logistics involved. With offices in Rutland and Williston, Vermont Copper Leaf Financial develops a customized wealth management plan designed to integrate every aspect of your financial life. Our approach is to provide clarity and calm amidst the chaos. Where there is uncertainty, we look for facts. We call our approach evidence-based investing. Call us today at 802-878-2731 to schedule a strategy session and begin building your road map to financial success. You can also email us at [email protected] or visit our website.
This material has been authored by a 3rd party and CLF makes no representation and takes no responsibility for the accuracy of the information presented.