When people think about estate planning, they typically think about what will happen to their assets and their heirs after they are gone. However, estate planning is also about preparing for all sorts of scenarios, including the possibility that you may someday need help managing your financial affairs due to incapacitation or illness.
Creating a financial power of attorney enables you to pick the person you want to handle financial matters for you if you’re incapacitated. This document gives them the power to act on your behalf to pay your bills, buy and sell assets, and take care of anything that involves your finances.
Who should you name in the financial power of attorney document?
You should choose someone who you fully trust. Since this person will have broad powers over your finances, you must know that they will act in your best interests. They shouldn’t ever do what’s best for themselves.
Some people choose to give a trusted family member this power, but others opt for a friend. Either of these is a good option as long as you’re comfortable with your choice. One thing to consider is that your family members might be especially upset about your condition. Having to make complex financial decisions might be difficult under those circumstances.
There are various types of power of attorney designations that can enable your chosen person to handle these matters for you. Discussing the specific circumstances you’re facing with your attorney can help you to discover which option is the best for your situation. Just remember that you should get this done as quickly as possible so it’s in place before anything happens that would require it to be used.