There are many components in a comprehensive estate plan. While many people think about the will and trusts, the power of attorney designations should receive equal attention.
As part of your estate plan, you need to establish a financial power of attorney designation. This gives the person you choose the ability to make decisions about your financial matters.
Why is a financial power of attorney important?
If you’re incapacitated, the person who is named as your financial power of attorney can make sure that your bills get paid. They can also do much more. They can act as you would in all financial matters. This means they can purchase assets or sell them. They can open and close accounts for you and handle anything related to money or assets.
Who should you name as the financial power of attorney?
Your power of attorney for your financial matters should be someone you completely trust. After all, this individual is being trusted to act in your best interests, at your direction or according to your wishes. They can’t be motivated by self-interest. Some people choose to have a close family member handle these duties; however, some don’t want to put that pressure on their loved ones so they choose a trusted friend instead.
It’s important to ensure that the person who you want to handle these matters has the proper legal backing. Discuss your wishes with your estate planning attorney so they can help you to get the documentation in order so your chosen person can do these duties if the time comes.