Importance of Financial Power of Attorney
When you can no longer make financial decisions for yourself a Financial Power of Attorney gives another individual the capability to take financial decisions on your behalf. Read on to learn more.
Understanding a Financial Power of Attorney
A Financial Power of Attorney is a legally binding document whose purpose is to appoint a someone known as the agent to manage the finances for someone else known as the principal. The document may become effective immediately but, in most cases, does not come into play until the person who is the principal is incapacitated.
The purpose of a Financial Power of Attorney has the aim of not requiring the intervention of the courts. A bank may make an account inaccessible until the individual is incapacitated until the court authorizes a person to manage the account. However, a Financial Power of Attorney gives the bank the discretion to allow the agent to manage the account.
What Happens When a Financial Power of Attorney Is Not In Place
It may become very difficult for the people responsible for an individual who is incapacitated to take financial decisions on their behalf until a court appoints someone to the role of conservator. This is a very expensive and complex process involving a lawyer whose task is to represent the needs of the person who is incapacitated. The court than investigates to determine if the person is truly incapacitated and whether the proposed conservator is suitable for the role. The good news is there is a less of a risk when a person has a married spouse with joint financial responsibility. Nonetheless, there are still many instances where a Financial Power of Attorney is still important. For example, a spouse may be unable to make changes to their partners employment related retirement account. In that case a financial power of attorney is a helpful tool.
The Financial Power of Attorney Document
Ther is not a standard financial power of attorney document in Arizona. A document is most likely to be seen as valid when it was prepared at the same time as the will of the principal or at the time of the writing of their living trust by a reputable state-based lawyer who specializes in estate planning while the principal was still in a position where they could make those decisions for themselves.
When Does a Financial Power of Attorney Start to Be Effective?
There are two terms to consider here called “springing” and its opposite “non-springing.” I the case of a springing financial power of attorney it comes into play when incapacity has been determined formally and the document will include the regulations and procedures that detail this decision. Conversely, a non-springing financial power of attorney does not require the need of formal determination of incapacity but can be very tough to obtain when it is needed. It is important to review and draw up a new financial power of attorney document every few years, all the more so when the principal already has been diagnosed with a condition that limits their mental capacity.
Choose the Right Lawyer in Arizona
Regardless of the choice you make, it’s important you make the best choice for you when hiring a divorce attorney. Remember: The decisions you make now can affect your future. Ultimately, choosing the best lawyer will depend on which lawyer feels best for you and your situation.
If you want to learn about Michelle N. Ogborne and see if she is the right attorney to represent you in your collaborative divorce in Arizona, contact us today!
