Young people
– if you have an accident or suddenly fall sick, a power of attorney will allow your family to pay your outstanding bills, deal with insurance, and take care of your finances.
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Financial Power of Attorney: a Complete Guide
Have you ever thought about who will pay your bills, deal with insurance companies, cancel subscriptions, manage your assets, etc. if you suddenly become incapacitated? These are important questions to consider. Luckily, by creating a financial power of attorney, you can ensure that an individual you trust is able to step in whenever necessary and take care of those aspects of your life.
While in the past you had to visit an attorney to have a POA drawn up, nowadays you can do it online from the comfort of your home. Online services make it incredibly easy to create wills and power of attorney documents without having to spend lots of time or money. Online estate planning documents are just as legally valid as forms prepared by a lawyer in person.
Best Online Power of Attorney Services
Power of Attorney Definition
A power of attorney is a legal document that allows another person, also called an agent, to perform certain actions on your behalf. There are several types of power of attorney documents regarding health, finances, and other affairs. In this article, we will talk about the financial power of attorney. This document is also called a general power of attorney, and it allows you to designate a person to make financial decisions on your behalf.
A financial power of attorney is also sometimes called a durable power of attorney. The two types of POAs are very similar, but the main difference between these two documents is that the latter remains intact even if you’re incapacitated and can no longer communicate, make decisions, etc.
Powers Granted by a Financial Power of Attorney
When you create a financial power of attorney and name your spouse, relative, or friend as the agent, you give them the authority to make business decisions on your behalf, purchase or cancel insurance, hire people, make major financial decisions, manage your real estate assets, give away your money as gifts, resolve legal claims, and more.
Situations When a Financial Power of Attorney is Necessary
A general, financial, or durable power of attorney is not just a document elderly people need. In fact, adults at all stages of life could benefit from having a financial power of attorney.
Newlyweds and new parents
– getting married and having children changes your life dramatically and puts a lot more responsibility on you. Getting a POA drawn up will allow you to feel confident about your family’s future in case you become incapacitated.
New retirees
– when it comes to financial matters, it’s important to plan ahead, so make sure you create a durable financial power of attorney while you’re still in good health.
People recently diagnosed with a serious illness
– as the saying goes, hope for the best but prepare for the worst. Try to take care of all the legal matters and create a durable POA early on so you don’t need to worry about it during the treatment process.
Business owners
– when you’re running a business, you’re responsible not just for your own well-being, but also for that of your employees. To make sure that your business stays on track even if you’re suddenly incapacitated, create a POA.
Becoming Incapacitated Without a Power of Attorney
If you become incapacitated before you’ve had the chance to create and properly sign a power of attorney, a member of your family will have to apply for guardianship. This is a lengthy, expensive, and invasive court process that most people would prefer to avoid. During the procedure, three medical professionals will need to personally visit and assess the individual who is presumed to be incompetent. If the individual is legally declared incompetent, he or she will lose the right to make any decisions in their life, including the right to vote. In order to avoid burdening your loved ones with the stress of applying for guardianship, the best thing to do is to create a power of attorney ahead of time.
Parties to a Power of Attorney
Principal
The person who creates the power of attorney and designates another party to act on his or her behalf.
Agent or attorney-in-fact
The individual or institution who is granted the power to act on the behalf of the principal.
How to Create a Power of Attorney Online
Before you can make a power of attorney, you need to choose which POA you want to create and which service you are going to use to do it. For instance, a power of attorney on LegalZoom costs just $35, while a Nolo power of attorney is available as part of their estate planning package. If you’re not sure which company to use, our website has detailed online will-maker reviews. When making a durable POA, you can decide whether the document will give the agent authority to make decisions on your behalf right away, or if instead you only want that to happen after you are officially certified by a doctor as incapacitated.
Once you know which document you’re going to make, you have to pick the agent who will hold power of attorney over your affairs in the event that you are incapacitated. Make sure to choose trustworthy people you can rely on to come to your aid and be available to help. You can also list several people in the POA in case one of those people isn’t available when the need arises.
The next step is to fill out the POA form online and grant the agent financial powers.
How to Sign a Power of Attorney
In order for the power of attorney to be valid, it needs to be properly signed. Each state has its own signing requirements for POAs, so be sure to check the laws in your state before creating the document. In most states, you will need to sign the document in the presence of witnesses, a Notary Public, or both. Once signed, the principal and the agent need to ensure secure storage of the documents. These security measures are tedious, but ultimately necessary in order to make sure that power of attorney over your life is granted to the intended recipient.
How to Change or Revoke a Power of Attorney
Final Words About Financial Power of Attorney
A power of attorney is a document that allows the individual creating the POA (the principal) to appoint an agent, who will then have the authority to make important life decisions on the principal’s behalf. There are several types of POAs, including financial, medical, and special, among others. Financial POAs become useful in situations when the principal can no longer make decisions for themselves, or when they can’t be present for certain financial transactions due to geographical or other constraints. POAs can be easily created online using online estate planning services.
Any adult can benefit from having a certified power of attorney document on file: it’s always better to have it and not need it, rather than needing it and not having it.