A durable power of attorney for finances, also known as a financial power of attorney, is a critical document in any estate plan. With a durable financial power of attorney, you can appoint a trusted individual to take care of your important financial affairs in the event you become incapacitated. Because most people avoid thinking about the possibility of incapacity, they also tend to avoid creating a financial power of attorney. Without it, however, your loved ones will most likely have to create a guardianship, conservatorship, or both to manage your affairs – typically costly procedures that can quickly drain your estate of assets.
How Does a Durable Financial Power of Attorney Work?
A durable financial power of attorney allows you to appoint a trusted, responsible person, known as an “attorney-in-fact”, to handle your financial matters upon your incapacity. You become incapacitated when you are mentally incompetent or too physically ill to oversee your own finances. You can also name an alternate attorney-in-fact to serve in the event your first choice is unwilling or unable to oversee your affairs. In Missouri, you can make your durable power of attorney as narrow or broad as you wish by granting or restricting the attorney-in-fact’s authority. Common powers include:
- Paying bills
- Handling banking
- Monitoring and managing investments
- Managing insurance and long-term care benefits
- Managing and collecting government benefits
- Making, amending, and revoking trusts
- Funding trusts
- Making and revoking gifts
- Creating and changing a principal’s survivorship interest in property
- Designating and changing beneficiaries
- Appointing guardians and conservators
- Designating substitute and successor attorneys-in-fact
If you want your financial power of attorney to remain effective after you have become incapacitated, you must specifically include the word “durable” in the document – otherwise, your power of attorney will immediately terminate upon your incapacity. Furthermore, unless you specify a specific date or event for the durable financial power of attorney to become effective, it goes into effect on the day you sign it. You can also specify a specific date or event, such as your incapacity, for the durable financial power of attorney to spring into action, which is why these types of durable financial powers of attorney are referred to as “springing powers of attorney.”
Springfield, Missouri Estate Planning Attorneys
Because a durable financial power of attorney conveys a great deal of authority on the person you entrust with your financial affairs, it’s important to work with a knowledgeable estate planning attorney when creating this potentially powerful document. Don’t leave your future to chance. Call the Law Office of Randy L. Smith, LLC today at (417) 841-2775 to speak to an attorney about your estate planning needs.
This website has been prepared by The Law Office of Randy L. Smith, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.