There are many things that you have to consider when you’re creating an estate plan. While many people focus on who is going to receive which assets, you also need to think about what is going to happen if you’re unable to make decisions for yourself because of incapacitation.
One thing to consider is how your finances will be handled. In order to ensure that your bills are paid and other financial tasks are taken care of if you’re incapacitated, you can give someone financial power of attorney.
What does a financial power of attorney do?
The financial power of attorney you name can make decisions about your finances, which can include paying your bills, cashing checks for you or handling assets and investments. You can set the scope of the agreement, so you can be sure that they have limitations or full access, depending on what you’re comfortable with. Their powers end when you die because the person you name as your estate administrator takes over the financial responsibilities.
The person you name as financial power of attorney should understand that they can only act in your best interests, which is known as their fiduciary duty. They can’t consider what will benefit themselves or others.
It’s a good idea to have a talk with them about your wishes, goals and priorities so they know how to represent you if the time comes. This also gives them a chance to ask questions if they aren’t sure about something.
Naming the financial power of attorney is only one task you have to consider when you set up your estate plan. Seeking assistance from someone familiar with this process may be beneficial so you can get the plan set in a way that reflects your wishes.
