Last week we took a look at Estate Planning and how a Last Will and Testament and Revocable Living Trust can help to protect your property during life and after death. Now let’s consider another important document that will help you manage your financial affairs during your lifetime as you age.
A Durable General Power of Attorney empowers your Attorney in Fact to manage money and pay bills for you and handle “all things legal and financial” Depending on how it is written, this document may be very simple and straightforward, with broad powers given to the Attorney in Fact, or it may be detailed and specific, including detailed instructions and limitations on the Attorney in Fact. It can be written to go into effect immediately or to go into effect only when you are proven to be incapable of making sound financial decisions for yourself.
Creating a Durable General Power of Attorney bears careful consideration, as you may not wish to give overly expansive powers to your named Attorney in Fact. On the other hand, limiting your attorney in fact in his or her powers may prevent him or her from making the best possible decisions regarding the management of your finances. You will almost certainly require the assistance of an attorney to consider the pros and cons and make informed choices about who the attorney in fact should be and how the document should be worded to suit your needs and objectives.
It might be frightening to consider handing over control of your finances to someone else. However, without a Durable General Power of Attorney in place, you risk damage to your financial stability and sacrifices in personal care as you age. At some point you may become unable to think clearly about your assets and to manage your money effectively. In that situation, you may become the subject of a state-controlled conservatorship, lose your rights and incur great expense. Or, you may fell victim to financial predators, or you may make unsound decisions that threaten your financial well-being. Rather than allowing this to happen, it is better to establish a plan and choose a trusted person to handle your financial affairs in the event that you become unable to do so. If you do not have family members to assist you, we have a number of professional contacts that can serve you in this role.
If you have questions about planning for your future, call us at 865-951-2410. We’ll be happy to help!