If you are a United Kingdom resident who always has managed all aspects of your financial life yourself from budgeting to keeping a checkbook register to handling your own 401(k) and other investments, you obviously are very intelligent and very organized. You may be someone who is operating a family business basically on your own. Have you ever wondered, though, about who will handle these things and make financial decisions for you during times when you cannot do so yourself? If so, you may wish to think about executing a financial power of attorney.
FindLaw explains that a financial power of attorney is a legal document, probably drafted by your attorney, wherein you appoint someone you trust, often called your attorney-in-fact or your financial agent, to make certain decisions and take certain actions on your behalf.
The durability aspect
Your financial power of attorney can specify a time period during which you want your agent to manage your financial affairs, such as during an extended period of time when you plan to be out of the country. This is called a “springing” financial power of attorney.
Your other option is to make it a durable financial power of attorney. In this case it goes into effect immediately and remains in effect until you die or revoke it at some time in the future, whichever of those events occurs first.
Examples of what you may want your financial agent to do
While you are in complete control of what you decide you want your agent to do for you, you may want to consider allowing him or her to do the following:
- Run your business, including paying its taxes
- Pay your personal bills and taxes
- Collect and deposit any Social Security, retirement benefit or other periodic payments you receive
- Buy and sell assets
- Manage your investment accounts, real estate holdings, etc.
- Buy insurance for your business and/or for you personally
Be assured that your agent cannot “run amok” and do anything he or she wants to do with your assets. Instead, he or she always must put your best interests ahead of everything else. This information is only intended to educate and should not be interpreted as legal advice.
