Many people think estate planning only has to do with passing assets down to your beneficiaries. This isn’t the case. You can also set up your plan for what will happen if you’re incapacitated. One component of this is designating a power of attorney for your financial affairs.
You should consider the duties this person has to perform so you can determine who to name. This is a major decision that you shouldn’t take lightly.
Why do you need a financial power of attorney?
The person you name as your financial power of attorney can do everything you’d normally take care of for finances. This includes paying bills, buying and selling assets and everything else related to money. You should ensure you choose someone who can make decisions based on what’s in your best interests. They shouldn’t have any self-serving tendencies.
One thing to remember is that the person who has financial power of attorney can only take care of things until you pass away. When you die, the duties move to the person you have named as the estate administrator. This person can be the same as the one who has the financial power of attorney, but it isn’t required.
You can help the person who has financial power of attorney to make decisions you’d make by discussing your wishes with them. This is also a time to provide other information, such as where you have accounts and how to handle your affairs.
Ensuring you have a comprehensive estate plan is crucial so you know your family is taken care of as well as possible when you pass away. You can get a head start on this by getting the power of attorney designations in order ahead of time so your affairs are in order.