There are many things to consider when you’re creating an estate plan. While you might be focused on making sure your loved ones get the assets you want them to have, you also need to think about who will make decisions for you if you can’t do it yourself.
One document that you need to have drawn up for you soon is the financial power of attorney. This document gives someone the right to take care of your bills and other money matters when you’re incapacitated.
What decisions can the person you name make?
The person who has your power of attorney for financial matters can do all the things you’d normally do. They can access your financial accounts, sell or purchase assets, make investment decisions and take care of similar things. It’s possible to specify specific duties in the document and restrict them, but it’s generally a position of great authority.
Who should you name as your financial power of attorney?
Obviously, you need someone you trust. The person should be able to make decisions that are in your best interests without any consideration of their own desires or how the options will impact them. They should make the decisions that you would make if you were still able to do so.
While some people name a spouse, adult child, or an immediate family member as their power of attorney, this might not be a good idea. The person who you name in this document needs to be able to think clearly. If you’re incapacitated, people who are closest to you might be emotions. Of course, you may have someone who’s that close to you who could still make those decisions.
Your estate planning attorney can help you evaluate your choices. Remember, this is only one estate planning component you need to complete to have a comprehensive plan in place.