There are many reasons why it might become useful or necessary to transfer authority over your financial affairs to someone else. In some cases, people wish to take immediate action due to a sudden crisis or an absence from the country. There are also situations where someone appoint a trustworthy individual to act on their behalf in the event that they become unable to manage their own financial matters at some future date.

A financial power of attorney (FPOA) is a legal instrument that can be tailored to your particular needs. As the principal, you can name someone you trust to act as your agent on a temporary or permanent basis. You might simply want a loved one to handle bill payments or seek someone to take care of more complex concerns, such as managing investments, selling property or filing taxes. With a valid FPOA, you can be confident that key financial tasks will be managed capably if you become unable to do so yourself.

The scope of a financial power of attorney depends on how it’s drafted. A general FPOA gives the agent broad authority to manage the principal's financial affairs, while a limited FPOA restricts the agent’s powers to specific tasks or transactions. For example, you could execute a document that gives your agent the ability to represent you in a specific real estate transaction, but nothing else. 

Some FPOAs are durable, meaning that they remain in force even if the principal no longer has the capacity to execute legal documents. By establishing a durable FPOA, you will have someone in place to manage your financial issues in the event that you are incapacitated by injury or illness. Should you create an FPOA that is not durable, the grant of authority would terminate once you lack legal capacity. 

Many seniors find dealing with financial issues to be increasingly difficult as the years pass. Unfortunately, the vulnerability of older Americans has made them the target of unscrupulous individuals and businesses. Creating an FPOA can help guard against potentially devastating losses due to fraud, mistake or coercion. Without a valid FPOA, your loved ones might need to seek a court-appointed conservator to manage your finances if you become incapacitated. These proceedings can be time-consuming, expensive and emotionally taxing.

Even if you are healthy and capable, a financial POA can be useful. For example, you might travel frequently, live overseas or face other situations where you need someone to act on your behalf temporarily. Choosing a trusted agent gives you control over who will manage your finances. This can help prevent potential misuse or mismanagement of your assets by an unappointed individual.

The first step toward establishing a sound financial power of attorney is finding an experienced lawyer who will draft an instrument that reflects your circumstances and wishes. The Law Firm of Joseph M. Udall, PLC in Mesa, assists Arizona clients with FPOAs as well as other types of estate planning documents. Please call (480) 500-1866 or contact us online to schedule a consultation.