You’re going to use a financial power of attorney to make your spouse or one of your children your financial agent. If something happens to you — you’re in a coma after a car accident, for instance — then you know that someone is still able to take care of your estate. This person has the legal authority to make decisions that usually only you would be allowed to make.
So, what are some of the duties your financial agent may take on? The specifics are different for everyone and are determined by your own financial situation, but common examples include the following:
- Paying the government the proper amount of annual income taxes, property taxes and the like.
- Paying any expenses you still have on a consistent basis, such as electric bills, gas bills and hospital bills.
- Dealing with your financial accounts. This means the person has access to your bank account, for example, or your credit cards.
- Dealing with real estate. Real estate may be sold, rented or kept. Someone has to make all of these decisions and take necessary actions to ensure they go smoothly.
- Paying the medical bills. The reason you are incapacitated could be costly.
- Handling retirement funds and related assets, such as a pension plan.
- Selling or transferring all minor assets. You may want to give your children the ability to divide assets before you pass away, for instance, to lower the financial impact of keeping them yourself. For example, keeping the home means paying taxes and other costs out of your estate, whereas selling it allows the kids to split the proceeds.
These are just a few examples, but they show just how powerful these legal orders can be. If you’d like to learn more about your rights and the paperwork you’ll need, our website can answer many of your pressing questions.