Exploring the Capabilities of a Financial Power of Attorney- What It Can Do for You

What can a financial power of attorney do?

A financial power of attorney is a legal document that grants someone the authority to manage another person’s financial affairs in the event that they become incapacitated or unable to make decisions for themselves. This document is crucial for ensuring that your financial matters are handled appropriately and efficiently during times of need. In this article, we will explore the various responsibilities and powers that a financial power of attorney can hold, helping you understand the importance of this legal tool.

Responsibilities of a Financial Power of Attorney

1. Manage Financial Accounts: The attorney-in-fact (the person granted the power of attorney) can access and manage the principal’s (the person granting the power of attorney) financial accounts, including bank accounts, investment portfolios, and retirement funds.

2. Pay Bills and Expenses: The attorney-in-fact can pay the principal’s bills, such as rent, mortgage, utilities, and other monthly expenses, ensuring that the principal’s financial obligations are met.

3. File Tax Returns: The attorney-in-fact can file the principal’s tax returns and handle any tax-related matters, including audits and correspondence with tax authorities.

4. Make Investment Decisions: The attorney-in-fact can make investment decisions on behalf of the principal, including buying, selling, or holding investments, as long as the decisions are in the principal’s best interest.

5. Access Health Insurance and Benefits: The attorney-in-fact can communicate with insurance companies and manage the principal’s health insurance and benefits, ensuring that coverage is maintained and claims are processed correctly.

6. Handle Real Estate Transactions: The attorney-in-fact can buy, sell, or rent real estate on behalf of the principal, as well as handle any related legal matters.

Powers of a Financial Power of Attorney

1. Sign Checks: The attorney-in-fact can sign checks on the principal’s behalf, ensuring that the principal’s financial obligations are met.

2. Enter into Contracts: The attorney-in-fact can enter into contracts on the principal’s behalf, such as leases, loans, or insurance policies.

3. File Lawsuits: The attorney-in-fact can file lawsuits or defend against lawsuits on the principal’s behalf, as long as it is in the principal’s best interest.

4. Access Personal Records: The attorney-in-fact can access the principal’s personal records, such as medical and legal documents, to ensure that the principal’s affairs are managed effectively.

5. Make End-of-Life Decisions: In some cases, a financial power of attorney can also grant the attorney-in-fact the power to make end-of-life decisions, such as determining the principal’s medical care or funeral arrangements.

Importance of a Financial Power of Attorney

A financial power of attorney is an essential tool for protecting your financial well-being and ensuring that your affairs are managed according to your wishes. By appointing a trusted individual to act on your behalf, you can avoid the complexities and costs associated with guardianship or conservatorship proceedings. Additionally, a financial power of attorney can provide peace of mind to both the principal and the attorney-in-fact, knowing that the principal’s financial affairs are in capable hands during times of need.