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Why You Need a Financial Power of Attorney

27 January 2016 by Jessica Spencer

Many people focus on drafting their last will and testament and they neglect to draw up a financial power of attorney document. This article discusses some of the benefits of having a financial power of attorney document in place.

You Choose Who Will Act on Your Behalf

A financial power of attorney document stipulates who will be your chosen agent to handle your financial affairs in case you are ill or incapacitated. For instance, that agent can sign contracts on your behalf in case you had a pending business contract just before you became incapacitated. The biggest benefit of having this financial power of attorney document is that you personally determine who your agent will be. In case you don't appoint one, court is compelled to choose someone that will serve in that capacity.

It Reduces the Costs or Delays Associated with Guardianship

The legal process to determine who should be guardian over your financial affairs while you are incapacitated can be a very long process. It can also be financially strenuous on your family since they have to engage a solicitor to represent them during the court hearings. Your foresight in having a financial power of attorney drafted can save your family members from those costs and delays.

You Have a Chance to Express Your Wishes

The process of choosing an agent gives you a very good opportunity to express your wishes to the person that you would like to be your agent. You also get to communicate those wishes to your loved ones so that they will be certain about what you want in case you become incapacitated. This discussion can help to cement your bond with your loved ones. It can also give you a chance to identify an alternative agent in case the one you wanted feels that he or she may be unable to conduct your financial affairs in the way you want.

Your Agent is Protected

The financial power of attorney document normally stipulates what actions the appointed agent can take to protect the assets of the person who appointed him or her.  This removes any suspicion of financial abuse in case the agent performs the stipulated actions (such as giving financial gifts to family members and friends of the incapacitated person).

A financial power of attorney is a document that has far-reaching implications. Talk to a solicitor in your area so that you get professional advice on what terms to include when you have this document prepared.

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