This is an excellent question raised by many of our former clients. Allow us to begin by explaining the purpose of a Financial Power of Attorney, and how it fits into your Estate Plan.
When you lose mental capacity, you also lose the ability to make important decisions on your own behalf. Of course, your loved ones can pursue recourse in the Courts by seeking and obtaining a Guardianship of your Property, but the process requires two lawyers, takes at least 3-4 months to have someone properly appointed, at least one hearing in front of a judge, and costs several thousand dollars in attorney’s fees and court costs.
Once appointed, detailed annual accounting reports also need to be filed. If you have signed a valid Financial Power of Attorney, however, your loved ones can begin managing your finances on your behalf without going through all of that trouble.
We know the idea of granting others full power over your finances is scary. However, this is the standard procedure for Financial Power of Attorney, and rarely (if ever) does anyone change/limit its effectiveness.
Your best course of action is to sign it while you have capacity, and keep it close to the vest until it is needed. You should tell your Agents where to find your Power of Attorney in case of emergency.
Conditioning authority in incapacity severely complicates your Agents’ ability to act when needed. Most banks will want to see physician’s certificates showing your incapacity for your Agent to do anything and often still reject the Power of Attorney.
This can be costly and time-consuming for your loved ones, and frustrate the purpose of your estate plan. If it has to be effective immediately, why can’t I just wait to sign it?
We encourage our clients to sign the document right away. Many of us reasonably assume that our loss of mental capacity is far down the road. However, a core component of Estate Planning is preparation for the unexpected.
We are all one accident away from significant injury that could leave us, even if only temporarily, unable to make decisions on our own behalf.
Please call us if you would like help protecting your money and loved ones in the event of death or disability. You can call out Client Intake Manager at 301-696-0567 during regular business hours, email us at firstname.lastname@example.org, schedule online at lenaclarklegal.com, or speak to one of our 24-hour representatives after hours.
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