Making a financial power of attorney, also called a durable power of attorney for finances, is a great idea for anyone with income or property, especially if they have people who depend on them. It’s particularly crucial if you suspect that your health issues might make you incapable of managing your finances over time.
Having a financial power of attorney helps make certain that someone you truly trust will be the one to handle your finances in the event you become unfit to do so on your own. For instance, you need to pay your bills, deposit money to your bank accounts, pay your insurance, or manage your business, manage your investments, or handle repairs to your property. You could leave these tasks to someone trustworthy using a financial power of attorney.
The problem with guardianship or conservator-ship proceedings
If you become incapacitated and can’t handle your financial affairs, and you don’t have a financial power of attorney, your loved ones or relatives would need to let the court decide on who should manage your finances, explains a planning and probate lawyer from Denver-based Miller & Steiert, P.C.
This process is called guardianship or conservatorship, and it could be embarrassing and costly. The people interested in managing your finances must inform the court that you’re incapable of handling your financial affairs, which is something that should be a private matter but won’t be because court proceedings will go into public record.
Additionally, in some cases, the court might require the publication of the guardianship proceedings in local newspapers. And if your loved ones or relatives argue over who should be your guardian or conservator, they would need to bring in lawyers to support their case.
When guardianship or conservator-ship proceedings might be more appropriate
No one likes the stress and time that intrusion and costs associated with guardianship or conservator-ship proceedings come with. On the other hand, these proceedings might be more preferable in select circumstances such as if you want the court to supervise your financial affairs because you don’t have anyone in your life that you completely trust to do right by your finances.
Guardianship proceedings might likewise be ideal if you have strained family relations. A financial power of attorney is a legal document that is powerful and readily accepted by courts, and people who try to challenge it usually lose the case. However, if you feel that your family would contest your financial power of attorney or continue fighting with your appointed agent, consider guardianship instead. Because there are many things to consider when making a financial power of attorney, mainly if you need one at all, consult an experienced attorney to explore your options.