Financial Powers of Attorney: Do You Need One?
by
Shae Irving, J.D.
Almost everyone can benefit from a durable power of attorney for finances.
Creating a durable power of attorney for finances -- sometimes called a financial power of attorney -- is a good idea for almost everyone with property or an income. It's particularly important, however, if you fear that health problems may make it impossible for you to handle your financial matters.
Why Sign a Power of Attorney
Making a durable power of attorney ensures that someone you trust (usually called your "agent") will be on hand to manage the many practical, financial tasks that will arise if you become incapacitated. For example, bills must be paid, bank deposits must be made, and someone must handle insurance and benefits paperwork.
Many other matters may need attention as well, from handling property repairs to managing investments or a small business. In most cases, a durable power of attorney for finances is the best way to take care of tasks like these.
Avoiding Conservatorship or Guardianship Proceedings
If you don't have a durable power of attorney and you become incapacitated, your relatives or other loved ones will have to ask a judge to name someone to manage your financial affairs. Depending on where you live, the person appointed to manage your finances may be called a conservator, guardian of the estate, committee, or curator.
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Conservatorship or guardianship proceedings can be expensive and embarrassing. Your loved ones must ask the court to rule that you cannot take care of your own affairs -- a public airing of a very private matter. Court proceedings are matters of public record; in some places, a notice may even be published in a local newspaper. And if relatives fight over who is to be the conservator or guardian, the proceedings will surely become even more disagreeable, sometimes downright nasty. All of this causes costs to mount up, especially if lawyers must be hired. (For more information, see Conservatorships and Guardianships.)
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