The older we get, the more difficult it may be to take care of ourselves. Many physical and mental health conditions make it difficult to continue to make important financial and medical decisions. That is why estate planning experts often advise Miami residents to choose people to serve as their medical power of attorney and financial power attorney, if they become incapacitated or unable to make their own decisions. Today, we focus on the responsibilities of a financial POA.
What are the responsibilities of a financial POA?
If you, the principal, draft and sign a financial power of attorney document, the person you choose to act on your behalf, the agent, will hold the power to make financial decisions essentially as you. A person in this role may be responsible for any of the following:
- Completing financial transactions.
- Transferring funds to beneficiaries.
- Handling litigation.
- Completing transactions relating to the estate.
- Paying bills.
- Managing government benefits (e.g., Medicare or Social Security).
When does a financial POA go into effect?
Generally, a financial POA is a durable POA and becomes legally binding immediately after it is signed by the principal. However, if it is a springing POA, it will go into effect once you lose capacity.
If you choose a limited POA, you can limit the agent’s scope of power. In other words, you can restrict the agent’s power, only allowing them to handle certain transactions or act on your behalf for a specific amount of time.
When does a financial POA end?
If you have a durable POA, you can revoke it at any time, but it will terminate when you pass away. A springing POA will end when you regain capacity. As for a limited POA, it will end when the specific transaction is completed, or the time period specified in the POA ends.
If you are interested in naming an agent for your financial POA, an estate planning attorney can advise you on who to choose and how to draft a POA document.