Anyone who has experienced a family member or friend in a health crisis knows the potential emotional and financial challenges that can occur. One of the best gifts we can give our loved ones and ourselves is being prepared for those situations in advance. Having financial information organized is the first step. We all know that having the right amount of insurance, an up-to-date will and other estate planning is important. These actions give direction for administering our assets, money, custodial designation for minor children and other needs. The person you designate as personal representative or executor takes that role after death.
We often, however, neglect to address needs that can arise while living. If one is incapacitated, either temporarily or permanently, it may be difficult to take action on any financial matters without proper preparation. A power of attorney allows a person you choose to make financial decisions on your behalf. This can be as broad or as limited as you want. A designated person (attorney-in-fact) can pay the bills, sell assets as needed, obtain financial information to help make decisions for affordable care options, apply for benefits or assistance as needed and so on. Without a power of attorney document in place, it can be a stressful, long and costly process to establish a guardianship through the court system.
The power of attorney must be established when the person (grantor) has full mental capacity to make that decision. You can find basic power of attorney forms on-line or at office supply stores. You may want to consult an attorney to make sure it meets your specific needs and would be recognized in your state. You must choose someone that is trustworthy and competent to carry out this fiduciary responsibility as it obviously also can be abused. The grantor of the power of attorney can choose to make it durable meaning it is in effect ongoing, even if the grantor becomes incapacitated. Authority can also be granted to a specific time period or situation such as a planned absence. Power of attorney authority ends at the death of the grantor or when the grantor rescinds the authority.
Make this a priority. Assess your needs for granting power of attorney to someone who would be handling your affairs if you were unable to do it for yourself. And if you have loved ones whose finances you would be handling, urge them to also act on initiating a power of attorney. Again, consulting an attorney may be advisable to assess your specific needs. It can be such a benefit for all parties involved.