What Is a Financial Power of Attorney?
A Financial Power of Attorney permits an individual to designate an agent — usually a spouse or close family member — to manage financial affairs and pay bills on the individual's behalf in the event he or she becomes temporarily or permanently incapacitated.
In the absence of a Financial Power of Attorney, a family may be forced to initiate a legal proceeding known as a guardianship proceeding if a loved one becomes incapacitated. In addition to being substantially more expensive than preparing a Financial Power of Attorney, guardianship proceedings can be time-consuming, stressful, and inconvenient for family members during an already difficult health crisis.
Although our firm will, upon request, prepare Limited Financial Powers of Attorney, we usually prepare Durable Financial Powers of Attorney, which continue to be effective even after a client becomes temporarily or permanently incapacitated. All Financial Powers of Attorney are terminated by the principal's death. Thereafter, the decedents assets are managed by a Personal Representative of a decedent's estate or the trustee of a trust.
Although the execution of a Financial Power of Attorney is both prudent and considerate, we also counsel clients to exercise caution in both the selection of their agent and the handling of the document itself because of the potential for misuse, financial abuse, or embezzlement. Accordingly, we frequently advise clients that they do not necessarily need to provide a physical copy of the document to a non-spouse agent until it is actually needed.
Scott Estate Law prepares several different types of Financial Powers of Attorney depending upon the client's personal circumstances, family dynamics, and financial situation.
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