One of the primary roles of estate planning is to ensure that your wishes are upheld, even if you are temporarily incapacitated due to a medical emergency. There are a number of estate planning documents that can help you achieve this goal, and to prepare for the unexpected. One of the most essential of these documents is known as the financial power of attorney.
But what is a financial power of attorney, exactly? And in what situations might you need one? Consider some of the basics from our team of estate planning lawyers.
What is a Financial Power of Attorney?
To begin with, let’s define the term. A financial power of attorney is a legal document, allowing you to name someone to act as your representative in matters related to business and finance. In other words, a financial power of attorney lets you appoint a trusted friend, family member, or colleague to serve as your agent and to make decisions on your behalf, should you fall into a coma or be otherwise unable to act on your own.
Note that a financial power of attorney lets you authorize someone to make decisions related to money or business; by contrast, a health care power of attorney will let you appoint someone to make decisions about your medical care. You can always ask your estate planning lawyer about the benefits of having both documents included in your estate plan.
What Can You Do with a Financial Power of Attorney?
A financial power of attorney will empower your agent to make the following types of decisions on your behalf:
- Buying or selling businesses
- Filing your personal income tax returns
- Buying or selling real estate
- Paying your debts and bills
Keep in mind that a financial power of attorney also has some limitations. Generally speaking, a financial power of attorney will only be in effect when you are incapacitated in some way; if you regain consciousness, your agent will no longer be able to act on your behalf. Also note that the person you appoint as your agent is required to always act in your best interests, not necessarily their own. An estate planning lawyer can provide further guidance regarding your financial power of attorney.
What Happens if You Don’t Have a Power of Attorney?
There are a number of reasons why it might benefit you to have a financial power of attorney in place, and the most obvious is peace of mind. By naming someone you trust to act as your legal representative, you can rest assured that your interests will be maintained, even should you experience a medical calamity.
Also keep in mind that, if you don’t have a financial power of attorney in place, and questions about your taxes or finances emerge, your family members may face frustrating and time-consuming legal delays as they try to make the right decision for you. By ensuring the right estate planning documents, you can spare them this headache and hassle.
An estate planning attorney can give more specific guidance regarding your need for a financial power of attorney.
Schedule a Consultation with Singh Law Firm
If you live in the Fremont, CA area and have questions about drafting a financial power of attorney, we invite you to contact Singh Law Firm.
Our estate planning attorneys have ample experience helping clients navigate their power of attorney needs. We are happy to answer your questions, and to furnish our knowledge of advanced estate planning considerations.
To speak with one of our attorneys, reach out to Singh Law Firm at your convenience.