Today we’re going to talk about power of attorney over financial decisions. I know I’ve mentioned them previously, so I wanted to take a few minutes to explain what they are and make sure everybody understands. So, whenever we do an estate plan, even the most basic one, we always include the option of a springing power of attorney over financial decisions.
It’s called a springing power of attorney because it “springs” into action only in the event of your incapacity. It doesn’t do anything unless you’re incapacitated. With this document, you nominate a power of attorney to be your financial power of attorney to make financial decisions for you in any event of your incapacity.
The reason you would do this is because if you’re incapacitated, you still need to pay your bills—your mortgage, gas, electric—the typical bills. If you’re an individual, then you probably need one of these documents, so that you can give that authority to someone else and they can pay your bills and get into your bank account to do so.
Again, I just want to emphasize that this only springs into action when you can’t make your own decisions. Whoever you nominate isn’t going to be able to do anything unless you’re incapacitated.
In this document you are able to customize it, so you don’t have to give them the authority over every financial decision, you check the boxes for the things that you want to give them authority over.
I emphasize individuals because many times with married couples, they have joint accounts. So, if one’s unavailable, the other one can go ahead and get in there and do what they need to do cause they’re both on the account. Even with married couples, there’s some accounts that are only individual accounts and if you need access to them, then you’re going to need this power of attorney. We also still do it for married couples in case they’re both incapacitated at the same time.
Power of attorney over financial decisions is something that is important for basically any estate plan. It’s a safety provision that helps in the event of an emergency.