If you are worried about who will handle your finances if you ever become incapacitated, you might want to consider a power of attorney. It is a document which grants another person legal authority to act on your behalf and make financial decisions. The person is called an agent or attorney-in-fact. A power of attorney can be of great use in times of emergency when the family is in crisis.
You get to choose how much power you want to give to the financial agent. When setting limits, it is important to consider what duties you would like them to perform. Common duties include paying bills, taxes and medical expenses. Financial agents might also have the power to deal with your real estate assets as well as financial accounts. You could also give them the authority to buy or sell your assets, and invest the money to generate income. Your agent has the right to hire an attorney to represent you in court. Even though financial agents have the right to make certain decisions, they must always be in your best interest. Creating a power of attorney is a simple process. You have to fill out the forms and get them signed and notarized. Your real estate agent and bank must be notified when giving someone power of attorney.
When granting someone authority, it is important to consider when you want it to be applicable. You may opt for a durable power of attorney, which gives the agent authority at all times. If you do not make it durable, the agent will only have power over financial decisions if you become incapacitated and unable to make decisions. Your agent does not have the right to make decisions after your death. In that case, you must name an executor in your will.
It is advisable to involve an experienced attorney before handing someone power of attorney. The attorney will help you fill out the forms and document the entire process.