There is no legal requirement to create a durable financial power of attorney but with so many benefits, it’s something to strongly consider.
Through a durable financial power of attorney, you give another individual, known as a financial agent, the power to manage your finances in the event of your incapacitation.
For example, if you suffer a serious injury or illness, your agent may need to step in and handle tasks such as:
- Paying your bills, taxes and medical expenses
- Managing your assets, such as real estate and retirement accounts
- Investing your money
- Helping to operate your small business
- Collecting paychecks and/or retirement benefits
- Accessing financial accounts, such as bank and retirement accounts
Keep in mind that your agent doesn’t have the power to do whatever they want. Instead, they must make decisions in your best interests, not theirs.
How to name an agent
If you’re on board with the benefits of a durable financial power of attorney, you’ll come face to face with the question of who to name as your agent. You have many options, but lean toward someone who is:
- In good financial standing
- Able to make decisions under pressure
Also, it’s generally best to name a different person as your financial power of attorney agent and medical power of attorney agent. This helps protect against a situation in which medical decisions are made based on your finances, as opposed to what’s best for you.
You don’t have to create a durable financial power of attorney, but if you want peace of mind from your estate plan, it’s something to strongly consider.