A Durable Financial Power of Attorney is a legal document that allows you to appoint someone, known as your "Attorney-in-Fact" or "Agent," to manage your financial affairs. The word durable means that the authority granted by this document remains in effect even if you become incapacitated.
Key Features of a Durable Financial Power of Attorney:
General Authority:
The document provides broad powers to your Agent, enabling them to handle a wide range of financial matters on your behalf, including:Managing bank accounts.
Paying bills.
Filing taxes.
Handling investments or real estate transactions.
Applying for government benefits.
Immediate Effectiveness:
Unlike some Powers of Attorney that only take effect after you become incapacitated (springing POAs), a durable financial Power of Attorney is effective immediately upon signing, unless otherwise specified.Durability:
The authority granted to your Agent is not affected by your future disability or incapacity. This ensures that your financial matters can continue to be managed seamlessly if you become unable to handle them yourself.Used for Incapacity:
While effective immediately, this document is most commonly used when you are unable to conduct your own financial affairs due to illness, injury, or other incapacitating circumstances.
Why Is a Durable Financial Power of Attorney Important?
A Durable Financial Power of Attorney is a critical part of estate planning because it provides continuity in managing your finances during unexpected situations. Without one, your loved ones might need to go through a lengthy and costly court process to obtain guardianship or conservatorship to handle your financial matters.