A financial power of attorney is a simple and inexpensive way to arrange for someone to manage your finances if you can not make decisions for yourself. If you become unable to decide matters for yourself and have not already prepared a financial power of attorney, a court proceeding may be necessary. Your spouse or relatives would then have to ask a court for authority over your financial affairs. However, you can avoid this scenario by preparing a power of attorney in advance.
A financial power of attorney can be drafted so that it goes into effect when you sign it. Many spouses have financial powers of attorney for each other. You can specify that you want your power of attorney to be “durable.” If you do not, it will end if you become incapacitated.
Alternatively, you can provide that the power of attorney does not go into effect unless a doctor certifies that you have become incapacitated. This is called a “springing” durable power of attorney. When you create and sign a durable power of attorney, you give another person legal authority to act on your behalf. That person is your agent.
You can give your agent as much or as little power as you decide. For example, you can give your agent authority to do any or all of the following:
pay your ordinary expenses
buy, sell, maintain, pay taxes on, and mortgage real estate
collect government benefits
handle bank transactions
buy and sell insurance policies
file and pay your taxes
operate a small business
transfer property to a trust
hire someone to represent you in court, and
manage your retirement accounts
The agent has “fiduciary” responsibilities to act in your best interests, maintain accurate records and keep your property separate from his or hers. If you require assistance in preparing a financial power of attorney, consult with an experienced estate planning attorney.
Juan C. Velasco, Esq. is a trusted attorney who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.