When creating an estate plan, most of your attention will go toward what happens to your assets upon your death. This is a big deal, but it's not the only thing to think about. You also have to plan for a potential incapacity down the road.
For example, you need to know what will happen to your finances should you be unable to manage them on your own. This is where a durable financial power of attorney comes into play.
With this, you name an agent who is responsible for the tasks you outline in your durable financial power of attorney agreement. Some of these can include:
- Paying your bills and taxes
- Paying medical expenses
- Collecting income and retirement benefits
- Managing your real estate
- Investing on your behalf
- Selling or transferring assets as necessary
- Buying insurance on your behalf
- Operating your small business in your absence
Just because a person is an agent doesn't mean they can do whatever they want. They still have to act in your best interest, which means following the guidance provided in your durable financial power of attorney agreement.
If you're interested in creating a durable financial power of attorney, think about these two things:
- The person who makes the most sense to act as your agent
- The responsibilities you want to give your agent in the event of your incapacity
Creating a durable financial power of attorney can be challenging, as it's never easy to think about an incapacity that could stop you from making your own decisions. However, once you have this in place, you'll feel better about the ability to protect your assets no matter what happens.