A Financial Power of Attorney (FPOA) is usually inexpensive, fairly simple to draft and can be a very helpful in estate planning. A properly created and executed FPOA, if needed, can save your family time and money.
The FPOA is a document that allows you to appoint someone to make financial decisions, handle financial matters, and obtain necessary financial information if you are unable to do so yourself. We draft our FPOA as a durable FPOA , which allows the document to continue to be effective even if you become incapacitated and it will cease to be effective upon your death.
You have to be competent to sign a FPOA, which means that you have to know what you are signing, why you are signing it, and be able to say you understand the FPOA. For an older person, it is important to have a FPOA in place while they are still mentally capable of understanding the FPOA. The properly drafted and executed FPOA can save a family a great deal of time and money by circumventing the need to have a conservator/guardian appointed for their loved one by the Probate Court. The FPOA can accomplish the same thing as a conservatorship and guardianship, which is having someone take care of the incapacitated person.
When you sign a FPOA, you are not giving away any of your rights, you are just giving another person the ability to step into your shoes, in terms of your financial world. That person is known as your agent and your agent can act on your behalf. The FPOA can be effective when it is signed or it can be a “springing” FPOA that only becomes effective when you become incapacitated. Also, your agent is only allowed to do the things for you that are specifically listed in the FPOA.
A Financial Power of Attorney is a very useful document to have and it can save your family money and headaches if you should become incapacitated.