Incapacity requires careful planning.
Tragedy can strike at any moment.
Through a horrible accident or a sudden illness, you could be left incapacitated.
What will happen in this situation?
According to a recent WMUR article titled “Why you need a financial durable power of attorney,” not planning could put you and your loved ones in a perilous situation.
How do you prepare for incapacity?
What will this accomplish?
It will allow you to legally bestow authority upon a trusted agent to conduct financial transactions on your behalf.
These include paying bill, making gifts, collecting Social Security, accessing safe deposit boxes, filing tax returns, and overseeing retirement accounts.
What happens if you do not have this fundamental legal document in place?
Your loved ones will need to petition the court system for this authority.
This is costly in time and money.
Everyone of adult age should have a power of attorney to avoid this unpleasant, avoidable outcome.
There are a nuances in the types of powers of attorney you may need.
For example, one of the key nuances is when the authority you are given becomes legally operative.
The first is the general durable power of attorney.
Unless it provides otherwise, it begins working as soon as you sign it.
It is functional throughout your incapacity and ends when you die.
If you revoke the general durable power of attorney, then the agent will no longer have authority to act on your behalf.
Accordingly, this power of attorney is most helpful for a broad range of financial actions.
The second type of power of attorney is the "springing" general durable power of attorney.
What does this do?
It functions similarly, but only take action when certain conditions are met.
Often this condition involves a physician providing a written declaration of your incapacity.
Control is completely yours until you are unable to manage your own financial affairs and that fact is independently confirmed.
Do not attempt this alone, because there are other important nuances you need to know when it comes to powers of attorney.
These documents must comply with state law, too.
Work with an experienced estate planning attorney to set your affairs in order without delay.
Reference: WMUR (May 23, 2019) “Why you need a financial durable power of attorney”