The importance of a durable financial power of attorney





Why would you need a financial power of attorney – specifically, a durable financial power of attorney?

Consider this scenario: you are in a serious car accident. You hurt so badly that you are in the hospital, unable to communicate. The doctors expect you to live, but you will be in a coma for an unknown period of time. There are many issues and questions in this scenario, but one important issue: who will pay your bills and manage your finances while you are hospitalized?

Without a power of attorney, your spouse or family members may have to go to court in order to be granted the legal power to make financial decisions for you (like paying your bills or transferring money between accounts). However, if you have a durable power of attorney, it would take effect as soon as you became incapacitated, and your agent would be able to manage your finances as long as you were unable to do so yourself.

Things to know about durable financial powers of attorney

Here are a few important things to know about a financial power of attorney:

  • Unless you specify that a financial power of attorney is durable, it will automatically end if you become incapacitated. A durable financial power of attorney will become effective if you are incapacitated.
  • You can give your agent broad powers with a durable financial power of attorney so they can make any financial decision for you, or you can limit what they can do. For example, you could restrict your agent to only paying bills and filing your taxes, or you could also let them make investment decisions for you and you can even let them buy and sell real estate on your behalf.
  • Your agent is required by law to act in your best interest. They must also maintain accurate records, keep your property separate from theirs, and avoid any conflicts of interest. Your agent would be acting illegally, for example, if they used your credit card to buy something for themselves.
  • Your durable financial power of attorney will end if you die. It will also end if you revoke it, if a court invalidates it, or if your agent is unavailable.
  • You can name an alternate agent on your durable power of attorney to ensure that the document does not become invalid if your original agent is unavailable for whatever reason.

You can read more about durable powers of attorney – healthcare and financial – in our law library article “Protect Yourself with a Durable Power of Attorney”.

If you are a Pennsylvania resident and need assistance with your estate planning, asset protection, living trust, or special needs trust then the lawyers at Shields and Boris can help. To talk with an experienced estate planning attorney, please contact our law office today.

Elder Law Offices of Shields and Boris

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Wexford, PA 15090

Toll Free: (888) 444-4093

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109 VIP Drive
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Wexford, PA 15090
Phone: (724) 934-5044
Toll Free: (800) 879-0984
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