Who’s Got the Power (of Attorney)? Part 1 – Phoenix, AZ
There is an important role to consider as you grow older and set your finances in order for the future. Should you ever become incapacitated, someone will need to step into your shoes and act as your durable power of attorney. Preparing ahead of time can put your mind at ease that if required, all the legal documents are in place to allow loved ones to lead on your behalf. Phelps LaClair, with offices in Phoenix, Chandler, and Mesa AZ, is an experienced estate planning firm. For two generations we’ve specialized in helping families plan their estates and implement Living Trusts and Wills. And, we’ve helped quite a few family members establish crucial durable financial powers of attorney.
Durable Power of Attorney (POA)
Generally speaking, there are two different types of POA: a durable financial power of attorney (or agent) and a durable power of attorney for health care. They can be one and the same person. For example, you could name your spouse or a trusted family member as both your durable medical POA and your durable financial POA. Or, you could name two different people for these two distinctive roles.
Today, we’ll focus on the durable financial POA. When it comes to deciding who’s got the power to make critically important financial decisions on your behalf, you’ll want to choose carefully. As a rule, your financial POA will be a close family member, but sometimes that isn’t feasible. Your financial POA should be someone legally competent and over the age of majority. They should be an entirely trustworthy and faithful person whose honesty is unquestionable. Last, they should be capable of making wise financial decisions in line with your wishes.
Present Vs. Springing Financial Power of Attorney
The Present POA—as soon as you sign the papers for this POA, the power for decision-making is immediately transferred to the person you’ve named as your agent.
The Springing POA—The role of the springing POA, (or future POA) is activated at the time when your medical doctor determines you have become incapacitated or are no longer able to make sound decisions.
Establishing a Durable (Financial) Power of Attorney
When you’re setting up a power of attorney, plan to meet with an attorney to make sure your POA documents meet state requirements and that all documents are legally accurate and binding. And don’t forget to see that your bank gets a copy of your completed POA paperwork, so they’re prepared to release information and finances to your POA when the time arrives for them to take charge. You want your named agent to be able to successfully do the job you’ve asked them to fulfill, so be sure to work with your lawyer to make certain you’ve met all the prerequisites of your bank for setting up a POA.
When you establish a durable financial POA, take time to sit down with the person you’ve named as your agent to go over your current financial situation. Review with them your bank accounts, any loans or credit card accounts, all investments and insurance policies, and any other assets they’ll need to handle. They may need to pay bills, pay taxes, make investments, and even manage rental properties in your stead.
Finally, if at any point in time you change your mind about your durable financial POA, you can revoke it and/or create a new POA. If you dissolve a current POA in order to establish a new POA, remember to let your POA agent know about your change of plans.
If you’re in the Phoenix Valley and you have questions about creating a durable financial power of attorney or a durable power of attorney for health care, contact us today! We’ll be glad to meet with you, guide you through the process, and make sure your POA is legally accurate. And, your first consultation is absolutely free.
Images used under creative commons license – Commercial Use (6/22/18) Lars Plougmann (Flickr)