Powers of attorney are an important part of the estate planning process. Estate planners should know how a power of attorney can help them plan for incapacity as part of assembling an overall, comprehensive, estate plan.
Power of attorney for financial affairs
A power of attorney included in an estate plan can be useful is a variety of ways. In addition to a power of attorney for healthcare, which can be helpful, a power of attorney for financial affairs can also be helpful for capacity planning purposes.
A power of attorney for financial affairs designates a trusted individual to handle the estate planner’s financial affairs if they are incapacitated. Some of the duties of the agent can include:
- Pay the estate planner’s bills;
- Paying the estate planner’s taxes;
- Paying the estate planner’s medical expenses;
- Managing the estate planner’s real estate assets;
- Accessing the estate planner’s financial accounts;
- Investing on behalf of the estate planner;
- Collecting the estate planner’s retirement benefits;
- Transferring or selling the estate planner’s assets;
- Purchasing insurance for the estate planner;
- Operating the estate planner’s small business; and
- Hiring someone to represent the estate planner.
There may be certain requirements to setting up a power of attorney document that estate planners should ensure they follow during the estate planning process. Powers of attorney can be used effectively to help protect estate planners in circumstances of incapacity and can protect them in financial and healthcare situations when they or most vulnerable. For that reason, it is worth understanding how a power of attorney can be useful as part of an estate plan.