A power of attorney is a legal document allowing another person or entity you choose (called your agent) to act on your behalf, in terms of financial matters such as handling your finances and paying bills.
With a power of attorney, you ensure that if you cannot take care of items yourself, your affairs will still be handled. In the document, you give your agent authority only for the types of transactions you desire. For example, you could have someone perform any of the following tasks:
- Write checks
- Borrow money
- Sell assets
- Manage property
- Handle legal claims
- Gain entry to safe-deposit boxes
- Prepare and file tax returns
- Deal with insurance and retirement benefits
- Exercise stockholder rights
- Contract for services
- Make gifts to family and charitable organizations
Your power can be drafted to become effective now (a durable power of attorney) or later, if you become mentally incapacitated (a springing power of attorney).
A power of attorney must be signed by you and may need to be witnessed or notarized, depending on state law. Your selected agent could be your spouse or adult child, a financial professional, or an organization such as a bank. Choose someone you trust to honor your wishes. If you select an individual, name a successor in case the first person predeceases you.
Do You Need a Power of Attorney?
Yes! In case of a sudden accident or prolonged illness or incapacity, you'll want someone you trust to have the legal right to make financial decisions you would typically make, until you're able to make those decisions for yourself again.
When Does This Document End?
This document is used only while you are living and becomes null and void upon your death.
Where Do I Go for Help?
Because the laws vary from state to state, consult an estate planning attorney for more information.
The information and content contained herein are intended for educational purposes only and are not intended to provide legal, tax or other professional advice or to be relied upon. We encourage you to consult with an attorney, tax advisor or accountant.