Almost everyone with property or an income can benefit from a Durable Power of Attorney for finances. It’s particularly important, however, to have a Durable Power of Attorney if you fear that health problems may make it impossible for you to handle your financial matters. The main reason to create a Durable Power of Attorney for finances is to avoid court proceedings if you become incapacitated. If you don’t have a Durable Power of Attorney, your relatives or other loved ones will have to file formal court proceedings and ask a judge to name someone to manage your financial affairs. These proceedings are commonly known as conservatorship proceedings. Depending upon where you live, the person appointed to manage your finances is called a conservator, guardian of the estate, committee or curator.
The Nuts and Bolts of a Durable Power of Attorney
A Durable Power of Attorney for finances is an inexpensive, reliable legal document. In it, you name someone who will make your financial decisions for you if you become unable to do so yourself. If you ever do become incapacitated, the Durable Power of Attorney will likely appear as a minor miracle to those who are close to you. You can give your attorney-in-fact authority to do some or all of the following:
- Use your assets to pay for your everyday expenses and for those of your family.
- Handle transactions with banks and other financial institutions.
- Buy, sell, maintain, pay taxes on and mortgage real estate and other property.
- File and pay your taxes.
- Manage your retirement accounts.
- Collect benefits from Social Security, Medicare or other government programs or civil or military service.
- Invest your money in stocks, bonds and mutual funds.
- Buy and sell insurance policies and annuities for you.
- Operate your small business.
- Claim or disclaim property you get from others.
- Make gifts of your assets to organizations and individuals of your choosing.
- Transfer property to an existing living trust.
- Hire someone to represent you in court.
You can tailor your Durable Power of Attorney for finances to fit your needs by choosing which powers you grant and by placing certain conditions and restrictions upon the attorney-in-fact. For example, you can give your attorney-in-fact authority over your real estate, with the express restriction that your house may not be sold.
Things a Durable Power of Attorney Cannot Do
A Durable Power of Attorney does have limitations and restrictions. Here are some things a Durable Power of Attorney cannot authorize your agent:
- To make healthcare decisions for you.
- To marry on your behalf.
- To adopt anyone on your behalf.
- To vote for you in public elections.
- To represent you in legal proceedings.
- To make a will on your behalf.
- To give powers already legally delegated to someone else by another means.
- To continue to act on your behalf after your death.