Put Your Wishes on Paper Series - Part 2

This week, we’re picking up the discussion about the four main estate planning documents every adult should have in place. The second document we’ll discuss is a Financial or General Durable Power of Attorney. This document is different from a will because it is only in effect while you are still living. If you become incapacitated and are unable to handle your financial affairs on your own, having this document in place ahead of time will allow your designated representative, called the attorney-in-fact, to step in and manage your affairs on your behalf. This means they can help make sure your bills continue to be paid so lights are kept on at home or your child’s tuition is paid on time when you’re unable to manage your bank accounts yourself. When you create this document, you have the power to choose when it goes into effect, whether that’s at a specific point in time or only if you are deemed incapacitated under a doctor’s care.

Without this document, your loved ones will have to go to court to have a judge assign a person to be your representative, otherwise known as a guardian. Obtaining a guardianship can be costly in terms of legal fees and can be a lengthy process at times, so it’s something you’ll probably want to help your relatives avoid. Keep in mind, even relatives or spouses do not have the legal authority to act on your behalf if you become incapacitated and have not already granted them power of attorney over your affairs ahead of time. When you are thinking of who to select as your power of attorney, be sure to choose someone who is financially competent and trustworthy.

Tune in next week to read about the final two documents in our essential estate planning document series.

- Margaret Gooley, CFP®, CDFA®, Worley Erhart-Graves Financial Advisors