One of the easiest and most important things you can do to protect your financial affairs is to arrange for another person to manage your finances if you become incapacitated for any reason. Although many people overlook this important step, if you don’t set up a financial power of attorney, your assets could be thrown into chaos if unforeseen circumstances arise. You could also be leaving many years of hard work spent building your estate at the mercy of the courts who will decide how to handle your affairs.
The good news is that setting up a financial power of attorney is easy to do. Some states allow you to complete forms on your own while other states may require a more formal process. In all cases, you’ll need to make sure the document is signed in front of witnesses and then notarized. A separate but equally important document you may want to consider as well is a health care power of attorney, giving a trusted individual the right to make health-related decisions on your behalf if that ever becomes a necessity.
A financial power of attorney is flexible and can take effect at any time, not just after you sign it. For example, a financial power of attorney may kick in only after a doctor certifies that a person has become incapacitated. The person selected to have a power of attorney then becomes your agent and has legal authority to act on your behalf regarding your financial affairs.
You also have the ability to give broad-based authority to your agent, or limit them to only certain functions such as dealing with real estate, or securities or other specific elements of your estate. The key is to remember that a power of attorney ends when you pass away. The executor of your estate takes charge of your assets at that point.
Raun Muntz O-Grady LLP serves clients in Los Angeles, Hollywood, West Los Angeles, Santa Monica, Beverly Hills, Anaheim, Orange County and communities throughout Southern California.