Why Is a Financial Power of Attorney Important?

naperville estate planning lawyerIn the event that you become incapacitated, it is crucial to have someone you trust designated to make financial decisions for you. This trusted person, called an “agent,” will be able to look out for your financial interests when you can no longer do so, either temporarily or permanently. By creating a financial power of attorney, you can rest assured that the person you choose as your agent will be able to manage your finances and help with things like making sure your bills are paid. 

How Long Does a Financial Power of Attorney Last? 

You can set up your financial power of attorney to last as long as your incapacity does. This means that if you regain your ability to manage your finances, the power of attorney can be revoked. So, if you become temporarily incapacitated because of an injury or physical or mental illness, but you recover, you can regain control of your finances. However, if your incapacity is permanent, often as the result of illnesses associated with advanced age, your financial power of attorney will last for the remainder of your life. It does not give your agent any rights or responsibilities after your death. If you structure your power of attorney the way that most people do for this purpose, your agent will not have any authority of over your finances unless and until you become incapacitated.

What Is Covered in a Financial Power of Attorney? 

A financial power of attorney generally gives your agent broad abilities to manage your finances. However, it is entirely up to you what rights you want your agent to have. You can limit the scope of their powers, and specify what you do or do not want your agent to be able to do for you. You can give your agent the power to: 

  • Access your bank accounts or withdraw money from your retirement accounts in order to pay your bills and other expenses
  • Handle your taxes
  • Buy or sell stocks for you
  • Manage your benefits, like social security or a pension
  • Buy or sell real estate
  • Take control of your company
  • Manage your insurance policies

These are just a few examples of the powers you can choose to give – or not give – your agent.

Who Should I Choose as My Agent? 

First and foremost, you should choose a responsible adult who you trust. It is important to talk to someone before you name them as your financial power of attorney to make sure that they are willing to take on the responsibility of managing your finances when you are not able to do so. A person can not be forced to accept this responsibility, so make sure the person you choose agrees to. 

Many people choose a loved one, such as an adult child, spouse, or close friend. The most important thing is that your agent is someone you can trust to act purely in your interest. You can name an alternate individual in case your first choice becomes unable or unwilling. 

Contact Us for Help With Your Financial Power of Attorney

Sooner is always better! You must create a financial power of attorney while you are still competent to sign legal documents. Once you have become incapacitated, you will not be able to designate an agent for yourself. Gierach Law Firm is here for you and ready to take your call at 630-756-1160, or you can contact us online to schedule a confidential consultation. Our Naperville Estate Planning Attorneys can help you find peace of mind knowing that the person you choose will be able to manage your finances if you ever become unable to do so. 

Sources: 

Investopedia

Illinois Power of Attorney Act 

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