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.