- Posted by Tracy Zihmer
In Part 1 of this blog series, we talked about the first of three documents that a typical estate plan includes (at a bare minimum). To recap, those documents include:
- Last Will and Testament
- Financial Power of Attorney
- Healthcare Power of Attorney/Living Will
The Financial Power of Attorney is a document that allows a person that you name (that person is called an agent) to make financial decisions for you if you are not able to make those decisions yourself (you become incapacitated). These decisions include helping you with your banking, selling property, or even, in certain circumstances, changing your beneficiary designations. It is important that you trust the person that you name as your agent as they are given a lot of control over your finances. Your financial power of attorney should be customized based on your individual needs. You should discuss the various powers with your attorney to determine whether you want your agent to be able to perform those powers on your behalf.
If you do not have a power of attorney in place, your family may be forced to go through expensive court proceedings in order to be appointed as your guardian to make financial decisions for you during your incapacity. Therefore, the most cost-effective way to protect your finances in the case of incapacity is to appoint an agent in your Financial Power of Attorney.