Creating an estate plan means that you have to do more than provide instructions about who gets which assets. Making plans for who will make decisions about your finances if you become incapacitated is another important task.
A financial power of attorney is a tool that provides someone with the authority to make any financial decisions on your behalf in the event of your incapacitation. The agent you choose can have broad or limited powers, depending on the terms you set.
What are some examples of what an agent can do?
With broad powers, an agent can do anything that you would normally do on behalf of your finances. This includes paying your bills, accessing your financial accounts and purchasing or selling assets on your behalf.
Because the agent is acting for you in these matters, you should ensure that you choose someone who will follow your wishes. They can’t prioritize what they want or what others want them to do. Instead, every decision they make should be in your best interests.
A financial power of attorney is only valid while you’re living. Once you pass away, control of your finances transitions to the estate administrator you choose. Getting your estate plan set up in a way that allows for care if you become incapacitated and so your loved ones can follow your instructions after your death can give you peace of mind. Working with someone who’s familiar with your wishes and legal requirements for relaying those wishes is a good way to get started.