Many people who are creating an estate plan may focus heavily on what’s going to happen to their assets when they pass away. While that’s important, they should also think about who’s going to take care of their affairs if they become incapacitated.
One decision to make is who you will appoint for power of attorney (POA) responsibilities for your finances. This person will handle the financial matters you designate them to handle. This might include managing bank accounts, paying bills, taking care of insurance, filing taxes or making decisions about assets.
Because the person with financial power of attorney handles money-related matters, it’s critical that you choose someone who can do the job. This person should be trustworthy and responsible.
Choose someone who understands financial matters
The person you choose should also be someone who understands financial matters. The exact skills they need depends on what tasks they will have to handle. For example, if you have investments to take care of, you’ll need someone who understands investing. However, you may not need someone with that knowledge if your estate doesn’t include investment accounts.
Choose someone who can follow your instructions
The person to whom you give financial power of attorney should act in your best interests, which means they do what you would want done. They can’t make decisions that are in their own best interests. Because of this, it might be best to discuss your wishes with them while you can still relay them
Determining whom you want to have financial power of attorney is only one decision you have to make when you’re creating a comprehensive estate plan. Determining how to set up your plan can be a challenging decision, so it is wise to have experienced estate planning guidance.
