Financial Power of Attorney
Your Financial Power of Attorney is a key document in your Estate Plan that allows your loved ones to manage your financial affairs, in the event that you are unable to do so, without having to seek court intervention to be appointed as your Conservator.
There are two types of Financial Powers of Attorney. A springing or conditional Power of Attorney is where your Agent would not be able to handle your financial matters until two doctors provide the opinion that you are unable to manage your property and affairs effectively for reasons such as mental illness, mental deficiency, mental disorder, physical illness or disability, advanced age, chronic use of drugs, chronic intoxication, confinement, or any other illness, disorder or condition.
The second type is an immediate Power of Attorney that allows somebody power to be your Agent effective immediately. As such, there is no requirement that two doctors have to find you unable to manage your financial affairs. The immediate Power of Attorney is commonly used where an individual is at an advanced age and has someone they trust implicitly to help them with their financial matters.
An Agent’s powers may include, but are not limited to the following: paying bills, managing investments, buying and selling real estate, filing taxes, maintaining life insurance, etc. These powers can be expanded or limited as your situation requires.
In addition to the General Durable Power of Attorney, there is also a “Special” or Specific Power of Attorney. A Special Power of Attorney allows you to grant someone the legal authority to act or sign for you in the event you are unable to do so. The most commonly used Special Power of Attorney is for house or land deal closings. If the purchaser is not available at the time of closing, a Special Power of Attorney can be signed allowing the Agent to close on the property in place of the Principal.