No one can predict when an illness or injury may make it impossible to make decisions for or take care of yourself. If this happens to you, someone will need to be available to take care of your finances while you can’t.
If you fail to plan for this eventuality during the estate-planning process, your family members could spend a significant amount of time and money in court obtaining the right to take care of your business during your incapacitation. Unless, that is, you go ahead and create a durable power of attorney.
What is a durable power of attorney?
This estate-planning document lets you choose someone to step in and take care of your finances when you are unable to do so. You gain the peace of mind that a plan is in place and that you get to choose the person and not the court. You can decide whether your agent has power to act on your behalf immediately or will need a doctor’s declaration of incapacitation before acting.
Your agent will have as much or as little power as you decide, but if you put no specific limitations on your agent, he or she may perform the following tasks on your behalf:
- Hiring you a representative
- Paying your taxes
- Paying your bills
- Operating your business
- Purchasing your insurance
- Paying medical expenses
- Selling and transferring your assets
- Managing your real estate
- Accessing your financial accounts
- Collecting retirement benefits, if any
- Making investments for you
Your agent must act in your best interests. You may want to ensure that the person you choose to act in this capacity understands your financial wishes and goals and will make choices accordingly.
Creating and using your durable power of attorney
Like other documents included in your estate plan, your durable power of attorney requires witnesses and possibly the signature of a notary public. If the document does not comply with applicable Florida laws, a court or other party could reject it when it’s needed. Speaking of which, some financial institutions have their own forms, but should honor the one you create. If you have any doubt, contacting your financial institutions ahead of time may be wise. Moreover, if you will allow your agent to buy and sell real estate, the document may need recording in the public records.
Before executing a durable power of attorney, it could put your mind at ease to seek out the answers to any questions you may have regarding the significance and use of it. Resources are available to answer those questions and even help you with its preparation.