For many people, estate planning comes down to one thing: deciding if they should create a will or trust.
While this is a big decision, you don’t want to stop there. You need to push further, which means learning more about the benefits of a durable financial power of attorney.
As complicated as this sounds, it’s anything but that. With a durable financial power of attorney, you’re granting another person the power to manage your finances if you are unable to do so as the result of incapacitation.
Although you have the opportunity to set the limits of your agent, here are some of the tasks he or she may have to take on at some point:
- Managing your real estate
- Paying your bills (which includes your taxes)
- Investing on your behalf
- Paying medical expenses
- Buying insurance for you
- Managing your bank accounts
- Hiring help when you need it
- Operating your business in your absence
Remember this: Your agent does not have the power to do whatever he or she wants. The individual must follow the directions outlined in your durable financial power of attorney document, while also doing whatever is in your best interests.
There are two additional details to keep in mind:
- You don’t want to name just anyone to be the agent of your durable financial power of attorney, so make sure you carefully consider your final choice
- Your durable financial power of attorney doesn’t activate until (or if) you are incapacitated
As you create your estate plan, don’t spend all your time thinking about who gets your assets and how you will pass these along to them. You need to learn more about a durable financial power of attorney, as having this legal document in place will give you peace of mind.
Once you understand your legal rights and how to create a durable financial power of attorney, the only thing left is to push forward with the process. Once everything is in place, you never have to worry about what would happen to your finances if you were incapacitated.