Why You Need a Power of Attorney
A Power of Attorney is used to appoint someone to make financial decisions on your behalf in the event you are unable to do so for yourself. Our finances are often the part of our life that we hold close and are reluctant to let go of. Perhaps that’s the reason that deciding on a who will make those decisions is so difficult. But as with all estate planning, some sort of decision is better than no decision.
Source: LegalZoom
Common Q&A
(1) When will it take effect? It can take effect immediately or it can be “springing,” meaning you have to deemed incapacitated for it to take effect. There are benefits and drawbacks to both. Having it take effect immediately can be simple because they don’t have to get proof of incapacitation, which can take time. However, it does open you up to possible mismanagement since you are granting a lot of authority to someone.
(2) Can I change it? Yes, as long as you are mentally capable.
(3) What actions do I have to authorize? You can typically authorize all financial decisions or limit specific decisions or powers. It is entirely up to you.
If you would like to review the other 4 key estate planning documents, you can use the links below.
Revocable Living Trust (optional)
Thank you for reading,
Alex
This blog post is not advice. Please read disclaimers.