Why Power of Attorney is Important
What would happen if tomorrow you became seriously ill? What if you have a delimitating stroke? If you don't have a Durable Power of Attorney in place prior, then your family, including your wife, may not be able to have the necessary access to conduct your financial affairs.
A power of attorney is a legal document authorizing another person to step in on your behalf and step into your financial shoes.. The transaction might be as basic as paying bills and handling insurance claims or as complex as selling real estate and filing a tax return.
Without a power of attorney, your spouse, children or friends will probably have to petition the court to step in on your behalf, which is a cumbersome, time-consuming and expensive process at a time of immediate needs and emotional stress.
Just about any adult, young or old, single or married, should have a power of attorney. Yes, even married. While your spouse can probably take care of the basic bill-paying, many financial transactions, such as the sale of an investment or home, may require both spouses’ signatures. You may have some assets in your name only, like a 401(k) or IRA. In these types of accounts, your spouse has no access to those assets should they be needed to pay bills, due to the disability that is preventing you from handling your own finances.
Some types of powers of attorney are convenience documents used for specific transactions or to manage finances for a limited time while one is away. There is also a durable power of attorney for medical care, which appoints someone to make medical decisions on your behalf should you be incapacitated. This is a separate document.
The financial power of attorney we mostly recommend is a durable power of attorney. This goes into effect upon signing and remains in effect through any incapacity until your death. As long as you are competent, you can revoke your power of attorney anytime.
Beyond granting broad powers, the document needs to be specific about certain rights granted to the agent. For example, the grantor could give an agent the right to make gifts on behalf of the grantor, or the right to complete and sign your tax returns, exercise stock options, or sue a third party.
We have an Advanced Directives Kit that includes the Durable Power of Attorney for only $550.