People who are creating an estate plan typically focus on passing down their assets to their beneficiaries. While that’s the central focus of an estate plan, there’s something else to consider. This is who will care for your affairs if you’re incapacitated and can’t handle them yourself.
The financial power of attorney document gives the person you choose the power to take care of your finances. Establishing this can help to protect your estate, which can benefit your beneficiaries.
What can the person do?
The person you name in the power of attorney document can do anything you’d normally handle with your finances. This includes paying your bills, but it also gives them the ability to manage investments. They can buy and sell assets as they deem necessary.
Who should you name?
The person you name as the power of attorney should have the ability to follow your wishes without thinking about their own wishes. They can’t make decisions based on what will benefit them.
They should understand the financial concepts that are necessary to manage your finances. This will depend on what’s included, but be sure they understand the stock market or the intricacies of retirement accounts if those are part of your portfolio.
The duties of the financial power of attorney expire when you die. At that point, the duties will transfer to the person who’s your estate administrator. You must have your estate plan set up to reflect your current wishes so those individuals can handle things exactly as you intend. Working with someone familiar with these matters is beneficial so they can assist you with getting a comprehensive plan together.