One of the major components of an estate plan is the Durable Power Of Attorney, often referred to as the Durable Power Of Attorney For Finances. Our Los Angeles and Palm Springs estate planning legal team provides sound and practical legal advice regarding preparation of the Durable Power Of Attorney For Finances. Our legal team is here to help. We understand that this document is another key element of your comprehensive estate plan. We strongly encourage you to incorporate this document into your estate plan, and to seek qualified legal counsel to implement and safeguard your unique estate planning needs.
Understanding the Durable Power of Attorney for Finances
A Durable Power Of Attorney For Finances is a written document that allows you to designate a person or persons to manage your financial affairs if you become incapacitated in the future. It is equally important that you select individuals, as agents, who you implicitly trust without reservation to manage your financial affairs for your exclusive and personal benefit during your lifetime, if you are unable to do so. It is extremely crucial that you ensure that your hard-earned, valuable assets do not end up in the wrong hands.
This document not only gives to the “agent” (the selected individual) the power to manage your finances, but can also include specific directions about how you want your agent to handle your finances. This serves to provide you, and your loved ones, with peace of mind to know that your financial instructions will be honored and respected.
The main tasks that your agent will typically handle include:
- Paying your everyday expenses (this can also include your family’s expenses)
- Managing your savings accounts, brokerage/investment accounts, retirement accounts
- Filing and paying taxes
- Working with financial, accounting and legal professionals on your behalf
- Buying, selling, or maintaining your real or personal property
Your agent may also have legal authority to continue with the management or operation of your business interests and/or to select suitable individuals/professionals to do so. Other decisions regarding your finances—including insurance coverage and claims, investment decisions, and handling Medicare coverage and claims—may also fall under these responsibilities. This makes it extremely important for you to select an agent who is trustworthy and sufficiently skilled with financial management.
To learn more about creating a durable financial power of attorney or if you have questions about any other estate planning matter, be sure to contact our firm today. We can schedule an appointment to discuss your estate plan and your long-term goals.
FAQs
Does my Durable Power of Attorney for Finances end when I die?
Yes. Its authority ends at death — at that point, your executor or successor trustee takes over managing and distributing your estate under your Will or Trust, not your financial agent.
Can I revoke or change my Durable Power of Attorney after I sign it?
Yes, as long as you’re mentally competent, you can revoke or amend it at any time — for example, if your chosen agent is no longer the right fit, or your circumstances change.
Is a Durable Power of Attorney for Finances the same as a Power of Attorney for Healthcare?
No, they’re separate documents covering separate authority. The financial version lets your agent manage money and property; a Power of Attorney for Healthcare (or Advance Health Care Directive) lets a different (or the same) trusted person make medical decisions on your behalf. Most comprehensive estate plans include both.
What can I do to help prevent my agent from misusing their authority?
Choosing someone you trust without reservation is the most important safeguard, but your document can also include specific instructions, limitations, or reporting requirements for your agent to follow. An estate planning attorney can help build in appropriate safeguards when drafting the document.