For older Americans, putting together a sound financial plan, both for retirement and for one’s estate, is a very important project. Many people who put off making a plan in their younger years, though, overlook the possibility that they may lose the capacity to make their own financial decisions someday. Unfortunately, sufficient mental capacity to make these decisions is not something all of us retain until our death.
This is why it is so important for folks doing retirement and estate planning to think about appointing a power of attorney. A power of attorney, generally speaking, is an authorization to act on another’s behalf in some financial or legal matter. Some powers of attorney are more useful than others, though. Durable powers of attorney, in particular, are useful for older Americans worried about mental capacity, because they remain effective until the grantor’s death.
In Georgia, one can appoint an agent to handle his or her financial or business affairs. One can give his or her agent full authority to handle financial matters or can specify which specific powers are granted. One also has the right to revoke a financial power of attorney, but it must be in writing. The powers granted take effect immediately, unless a future date is specified.
The selection of an agent is, of course, an important decision. An agent should first and foremost be a trustworthy person, as well as responsible and able to handle his or her own finances.
To clarify: a power of attorney is not the same thing as a health care agent as identified in a health care directive. The two have different, but both important, functions. We’ll explore this further in a future post.
Source: Fox Business, “Why You Need a Financial Power of Attorney,” Donna Fuscaldo, July 16, 2013.