Many people believe they have their affairs in order by creating a Will that explains how they wish their assets divided at their death. Unfortunately, some people will suffer from some type of incapacity, either physical or mental, during their life. Few people have prepared a durable financial power of attorney to address that particular situation. A durable financial power of attorney is a document that provides direction to a selected individual to act as your power of attorney in the event you become disabled, either mentally or physically. Sometimes, a person is mentally disabled and is unable to make decisions for himself. However, equally important, although you recover from it, is when you suffer from a physical disability that prohibits you from transacting your business. For instance, you are suffering from broken bones and are confined to a bed. A properly created durable financial power of attorney will allow someone to act as your attorney in the event you cannot attend to your affairs.
A proper durable financial power of attorney will give to a designated person the power and authority to transact business on your behalf. This can be as simple as making deposits or withdrawals from the bank, or as complex as selling real estate, stock, or other assets. If you are a business owner, you will want to make sure that your durable financial power of attorney has the authority to manage your business in your absence if you do not have a proper succession plan in place.
You should have this durable financial power of attorney become effective immediately upon its execution so that issues do not later arise as to whether you are incapacitated. If that issue arises, then the power of attorney of remains invalid until a court of proper jurisdiction determines your capacity.
By the making the document active immediately, your appointed power of attorney does not have to worry about going to court to prove that you are incapacitated, which can take a long time and cost hundreds of dollars. Because you are placing someone in a position over your assets, you will have chosen the most trustworthy and intelligent person in your circle of friends and family. Naturally, you should be able to trust this person even while you have capacity. You should periodically check your assets to insure that there has been no improper treatment of those assets. Naturally, if there is, you should immediately revoke the power of attorney by destroying the document that you created, creating a new one and informing your previously designated attorney that he has been removed as your power of attorney.
At Robert W. Hughes and Associates we can help you create a proper durable financial power of attorney so your wishes are carried out during your life. This is generally created in conjunction with a full estate plan that includes a will, as well as an advanced healthcare directive.
