As parents age, they may begin to need assistance with managing property and money. This change often occurs slowly, but there might not be any indication that makes it evident that the time is right now. One way that parents can ensure they’ll have the help they need is to set up a financial power of attorney.
A financial power of attorney is a document that appoints an agent to care for financial matters. This designation has to be set while the parent is still legally able, which means they must be of sound mind.
What can a financial agent take care of?
Generally, the financial agent will have the ability to pay bills and take care of assets. The exact duties and abilities depend largely on the wording of the power of attorney. At a minimum, it might be necessary to include the ability to pay bills, manage bank accounts, handle insurance matters, file taxes and communicate with financial institutions. Some financial power of attorney documents also allow the agent to manage investments and take care of real estate issues.
Creating a financial power of attorney can ensure that critical financial tasks are handled if the creator becomes incapacitated. This document doesn’t take away the elderly parent’s right to make their own financial decisions as long as they have the legal capacity to do so. Additionally, the power of attorney will cease when the creator passes away because the financial responsibility shifts to the personal representative named in their estate plan.
Ensuring the financial power of attorney reflects the creator’s wishes is critical, so it may be beneficial for them to work with someone who can assist with this. They should also set up the other components of their estate plan so they can rest assured that their wishes are known and relayed in a legally enforceable manner.