Get Your Power of Attorney in Place BEFORE You Need it!
One of the reasons why I became interested in estate planning was personally experiencing the huge impact of not having a proper estate plan and how it affects your loved ones. For me and my family, we were not dealing with the passing of a loved one, but when a family member was no longer capable of managing her own financial affairs, we needed a power of attorney. But it was too late to get something in place at the time we needed it because she no longer had the mental capacity to execute this very important estate planning document. And because there was no financial durable power of attorney in place, our family’s ability to step in and make her financial and legal decisions was frustrating, stressful and at times impossible.
Why is it important to have a Financial Power of Attorney in place before you become incapacitated? Because you are only able to execute a valid power of attorney when you have the legal capacity to do so. If you do not already have this document in place, and you later become incapacitated, it’s too late to execute this essential estate planning document. At that point, the probate court will appoint someone to be your conservator.
What is a conservator?
A conservator is a person appointed by the probate court to manage your financial life if you are no longer able to do so. The court must find that there is sufficient evidence that you are no longer capable of managing your own affairs (the court will rely on medical records and/or testimony from your treating physician). Once the court makes a determination, they will then appoint someone that they believe will act in your best interest. It is possible that the court could appoint a family member, but it is also possible that a disinterested county administrator could be appointed.
Conservatorship is only necessary when you become incapacitated and you do not have a valid financial power of attorney in place. It is important to remember that a financial power of attorney is a legal alternative to going through the court system to get someone appointed to manage your financial life for you.
So many of us are reactive, and we wait until there is a problem to attempt to address it. But in the world of estate planning, being reactive won’t help you or your family. It’s important that we know who YOU want to be in charge of your financial life if you were no longer able to manage your finances due to incapacity and/or disability. Having a power of attorney in place allows us to hear your voice so we know exactly who you want to be in charge if you could not be.
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