Central Coast Law
Protecting Your Estate’s Finances by Implementing Durable Power of Attorney
Establishing a durable power of attorney for finances is a straightforward and reliable way to arrange for someone to manage your finances in the event of your incapacitation. This designation will remove a significant amount of stress from your family members, who might otherwise be unable to maintain the financial affairs of your estate.
Below is a general overview of the durable power of attorney for finances and the benefit it can provide to you and your loved ones:
When it takes effect and ends
You may draft your financial power of attorney so that it goes into effect as soon as you sign it. You must specify that you wish this power of attorney to be “durable,” which means it remains in effect upon your incapacitation. This scenario gives your chosen agent the ability to handle certain financial affairs in your stead, even while you’re healthy.
The other option is to draft a springing power of attorney, which does not take effect until your attending physician certifies you are incapacitated. This allows you to maintain sole control over your finances until you are physically unable to manage them.
A durable power of attorney automatically ends upon your death, and thus your chosen agent has no authority to handle your financial affairs after that. To make matters simpler, you might opt to have your chosen agent be the same person you name to be the executor of your estate or your trustee. This enables the individual to continue to manage your estate’s finances after your passing.
You may also end a durable power of attorney by expressly revoking it. The court may also invalidate the document upon a challenge to your competency or if there’s evidence of fraud—or if there’s no agent available to act on your behalf.
The job of the agent
Your agent will likely have broad powers to handle your finances, though you can give your agent as much or as little power as you choose. The following are a few examples of powers you may grant to your agent:
- Ability to use assets to pay for everyday expenses
- Ability to purchase, sell, maintain, pay taxes for and mortgage real estate and other assets
- Ability to collect Medicare, Social Security or other government benefits on your behalf
- Ability to invest money in stocks, bonds and mutual funds
- Ability to file and pay your taxes
- Ability to purchase and sell any insurance policies or annuities
- Ability to handle transactions with banks, lenders and financial institutions
- Ability to continue operations of a small business
A skilled estate planning attorney can assist you in creating a document that establishes a durable power of attorney and offers you greater peace of mind about the future.
Schedule Your Consultation with Our Experienced California Estate Planning Attorneys
Central Coast Law is a top estate planning law firm in California. Our attorneys help families set up living trusts, wills, power of attorneys, healthcare directives in Santa Barbara, Ventura and Montecito.
Schedule a planning session with our experienced attorneys today to learn how we can help you and your family: 805-881-3281.