Estate planning isn’t only about planning for what happens upon your death. It can also be about planning for what happens should you become medically incapacitated in some way. For example, what would happen if you fell into a coma? How would you want your loved ones to respond, should you be unable to voice your own wishes or desires?
A number of estate planning tools are available to answer this question, including the financial power of attorney. In this blog post, our estate planning lawyers will provide further insight into what this critical document does.
What is a Financial Power of Attorney?
Let’s start with a basic definition. A financial power of attorney is a legal document that grants a designated representative the authority to act on your behalf in business or financial matters. In other words, if you are incapacitated in any way, your financial power of attorney will go into effect, endowing your named legal representative with the authority to handle your business affairs for you. The financial power of attorney remains active and binding until either you recover, or you die.
The Scope of a Financial Power of Attorney
So, let’s say you name your best friend as your financial power of attorney. What powers or responsibilities does your best friend have, should you become incapacitated in some way?
In this situation, your durable power of attorney would endow your best friend with the authority to do any of the following:
- Completing real estate transactions, including buying or selling properties, in your name.
- Filing your income taxes.
- Paying your bills.
- Handling financial matters for your small business, including selling it.
- Conducting any other financial transactions in your name, such as buying or selling stocks, allocating money in an investment portfolio, etc.
A durable power of attorney gives your representative the power to act on your behalf in any business or money-related issues. For a more comprehensive list, meet with a power of attorney lawyer from Singh Law Firm at any time.
Are There Other Kinds of Power of Attorney?
Estate planning lawyers will be quick to point out that, in addition to the financial power of attorney, you might also have a healthcare power of attorney.
This document works in much the same way, but with an important distinction: Rather than appointing someone to make financial decisions in your place, a healthcare power of attorney appoints someone to make decisions about your medical care, should you be unable to voice your own wishes.
You might have both of these documents within your estate plan, and you might name different people to serve in the two roles. Again, a power of attorney lawyer can answer any specific questions you have.
There are also limited powers of attorney, which allow you to name a friend, family member, or business colleague to serve as your representative for a very specific project. For example, you can appoint someone to sign one specific document on your behalf, if you are unable to sign it yourself. This is usually more about convenience than estate planning, however.
Learn More About Financial Powers of Attorney
A financial power of attorney can be an important addition to any estate plan. If you have specific questions about incorporating a power of attorney into your estate planning, we welcome you to contact Singh Law Firm.
We would be happy to counsel you on using a Power of Attorney in Fremont or the surrounding area. Reach out to us whenever you’re ready to schedule a consultation with our estate planning lawyers.
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The estate planning process provides many ways for you to plan for the future, and to mitigate life’s uncertainty. For example, none of us ever plan on being medically incapacitated, or of slipping into a coma or a vegetative state. And yet, these things can happen to anyone, whether due to illness, injury, or accident. The estate planning process offers a number of documents you can use to prepare for these contingencies. And one of the most essential is the financial Power of Attorney.
But how does this document work, exactly? Here’s a quick guide.
Power of Attorney 101
To begin with, a Power of Attorney is any legal document that appoints another person (say, a friend or family member) to be your legal representative, and to make decisions for you when you are unable to make them for yourself. For instance, working with a Power of Attorney lawyer, you can draft a document that goes into effect any time you become medically incapacitated. In other words, this document will confer legal decision-making powers to the person you’ve named as your appointee. The document will only be effective for as long as you are unconscious or unable to speak for yourself.
Different Types of Power of Attorney
When you meet with your Power of Attorney lawyer, you’ll learn more about the different types of Powers of Attorney that exist.
For our purposes today, we’re focusing on the financial Power of Attorney. This document allows you to name someone to serve as your representative in business or financial decisions, should you be unable to make those decisions on your own.
There are countless examples of what a financial Power of Attorney empowers someone to do, but a few examples include:
- Buying and selling real estate on your behalf
- Buying or selling businesses in your name
- Filing and paying your income taxes
- Paying bills in your name
- Making decisions about your investment portfolio, including buying stocks and bonds on your behalf
- Managing funds in your retirement accounts, such as IRAs
What About Medical Powers of Attorney?
A financial Power of Attorney can be valuable, but you may also wish to consider a medical Power of Attorney. This document works in much the same way as a Financial Power of Attorney, only instead of appointing someone to make decisions about your business needs, it appoints someone to make decisions about your medical care. For example, you can name someone to make decisions about if and when you receive breathing tubes and other life support treatments.
This is not to be confused with an advanced health care directive, which is an estate planning document in which you can outline your wishes for end-of-life care, ensuring there is no confusion about your values and preferences.
All of these estate planning documents can provide you with peace of mind about your future, and they can also prevent any uncertainty or infighting amongst your loved ones. Make sure you talk with a directive power of attorney expert to learn more about these different options.
Talk with a Directive Power of Attorney Expert from Singh Law Firm
As you consider your options for estate planning, including possibly having a durable Power of Attorney in place, we welcome you to contact Singh Law Firm. Our lawyers have ample experience handling complex estate planning needs for clients throughout the Fremont area.
We would love to sit down for a consultation to hear more about your needs and goals. To make an appointment with Singh Law Firm, contact our office at any time.
