A Brief Introduction to Financial Power of Attorney

When people think about estate planning, they tend to think about what will happen to their debts and assets after they die. While fewer people consider what happens if they become incapacitated, this part of estate planning is equally as important. Appointing a financial power of attorney is a way to prepare for the worst and rest easy knowing that you are protected.

Protecting Your Financial Matters

Ultimately, the goal of a financial power of attorney is to protect your finances if you should become incapacitated. In many cases, these documents are drawn up for adults with serious disabilities or who are likely to be unable to manage their own affairs down the road.

Consider how difficult it is to reach a human being and get the answers you need when you call your credit card company—and that’s when you’re the primary account holder. It becomes exponentially more challenging when you are trying to call in on behalf of an incapacitated family member and you do not have financial power of attorney.

This document outlines the circumstances under which an appointed loved one will be responsible for your financial affairs. When these requirements are met, they will be able to pay bills on your behalf, access your financial accounts, and meet your other financial obligations.

Choosing Someone You Trust

Perhaps the most important part of drafting a financial power of attorney document is appointing someone you trust wholeheartedly. If you become incapacitated, the person named in the document will have access to your accounts and financial assets—you should have full faith that they won’t abuse their position.

Do You Need a Financial Power of Attorney?

While this type of planning is usually utilized by aging adults or those with disabilities that leave them unable to handle their own finances, everyone should have a financial power of attorney in place. Otherwise, the delays caused by going to court after you become incapacitated can have disastrous consequences. Imagine, for example, that you are in a life-threatening accident that leaves you in a coma.

Since you do not have a financial power of attorney, no one can access your accounts or handle your assets. In the month that it takes for a parent or family member to get approval from the court, your credit cards have racked up late fees and dropped your credit score. You are at risk of eviction and your utilities have been shut off.

On the other hand, if you have a financial power of attorney in place, your named representative can take over these affairs as soon as you are incapacitated and give power back to you as soon as you are able to manage your own needs.

Estate planning means considering all possibilities and planning for every scenario. With the help of a skilled attorney, you can feel confident that your assets will be handled appropriately if you pass away or become incapacitated. Learn more about your options now by contacting The Werner Law Firm at 866-265-4467.