In the event of incapacitation, you want to know that there is someone who can step in to manage your finances. Furthermore, you want to know that the court won’t make this decision on your behalf.
A durable financial power of attorney allows you to name an agent. This is the person who has the legal power to manage your finances if you can’t do so, such as the result of a serious injury or illness.
You can choose almost anyone as your agent, but search for someone who has these traits:
- Good communication skills
- History of sound financial decisions
With these traits, you’ll be more confident that this person can handle tasks such as:
- Paying your taxes and bills
- Managing your day to day finances
- Paying medical expenses
- Keeping up with insurance premium payment
- Managing financial accounts, such as bank and retirement accounts
- Collecting paychecks and/or retirement benefits
- Managing real estate
- Managing your small business
When you name an agent for your durable financial power of attorney, you’re not giving this person the ability to do whatever they want. Instead, you’re giving them the power to manage your finances with your best interests in mind.
A durable financial power of attorney is a nice addition to any estate plan, especially in the event that you don’t have anyone close to you, such as a spouse, who could help with the management of your finances.
If you’re on board with the idea of creating a durable financial power of attorney, make sure you discuss your intentions with your agent to ensure that they’re okay with you naming them.