Financial Power of Attorney

  2 min read

Oftentimes, a financial power of attorney is as important as your will. A financial power of attorney ensures that you have an agent able to access and use your resources in the event you are incapacitated.

Let’s say that you are in the hospital and unconscious or unable to handle any financial affairs for 6 months or more. In that time period, if no bills were paid, you would leave the hospital with a new headache.

This is where the financial power of attorney comes in. Someone with financial power of attorney can pay those bills and take care of other financial matters. It’s better than having to deal with creditors after your hospital stay or – sometimes worse – needing a family member to front you money because your assets are unavailable.

A financial power of attorney becomes pointless after your death, but before you die, it is an essential and important tool for your loved ones to manage your affairs. Powers of attorney can be limited in scope or grant broad powers.

It is also important to talk with your financial institutions to make sure that they accept your power of attorney – they may have their own form that you should fill out to ensure a seamless operation for your agent.

A final point. At least in Texas, powers of attorney can be made effective immediately or they can be made effective only upon your incapacity (springing). For “Springing” powers of attorney, the agent will need a letter from a doctor stating that you are incapacitated. There are pros and cons to making your power of attorney effective immediately or springing. Be sure to talk with your attorney about what makes the most sense in your situation.