No one likes to think about it, but unfortunately, accidents happen. Should you become mentally incompetent due to illness or accident, you need to know your family can access your accounts and manage your affairs and finances easily and responsibly. With a Power of Attorney, you can appoint a trusted person to run your affairs while you are unable to do so.
The person or people you designate to act for you (referred to as your attorney) will legally be able to do anything for you that you are usually able to do, including making investment decisions, selling your assets and taking care of your family's (spouse, children) financial needs. You can state what you will and will not allow the attorney to do and the attorney is only allowed to act to protect your assets for you, your spouse and your dependent children. The attorney may be paid up to 5% of the estate assets.
If you do not have an enduring power of attorney in place and you lose mental capacity in the future, a family member or friend may apply to the court for an order of trusteeship. This is a costly and time-consuming procedure.
If You Don't Have an Enduring Power of Attorney
- Your spouse or other members of your family may have to hire a lawyer to obtain a trusteeship order from the court, which takes time and is expensive.
- You risk having someone you don't trust put in charge of your financial affairs.
- Your estate or business may be negatively impacted during the time it takes to resolve the situation.
Additional Information About Enduring Powers of Attorney
- There are two types of power of attorney. One takes effect as soon as it is signed and the other takes effect only if you become mentally incapacitated.
- A power of attorney does not necessarily mean an enduring power of attorney. Always discuss this with your lawyer before making a decision.
- Enduring powers of attorney do not necessarily come into effect only upon mental incapacity. Again, be sure to discuss your needs with your lawyer.
- Your needs may change and your legal arrangements may also have to be changed to ensure you are protected.
- Your lawyer will help you decide if this document meets your needs and whether you require special provisions.
- You can revoke your power of attorney at any time as long as you are mentally capable of doing so.
- An enduring power of attorney is no longer in effect after the maker's death.
Have More Questions?
Click on any of the following for more information: