Imagine this: You spend blood, sweat, tears (and lots of years!!) building your estate and safeguarding your hard-earned money. For my retirement, for the family, for our future, you say. Things are going a-okay all the while, and then out of the blue… They don’t. Life does a 180–it takes a bad turn, and you suddenly are no longer able to do and control things the same way for some unfortunate event. (Say, an ailment or a mishap)
Seems quite a hopeless and inescapable situation, huh? Well, it might seem so, but it definitely is, in every way, avoidable.
Estate planning is how! (Surprise!) Particularly, a Financial DPOA allows you to keep control of your finances, in the event that you are no longer capacitated (or become temporarily incapacitated) to do things on your own and make financial decisions for yourself.
Let’s dissect the name to understand!
First things first–let’s talk about what a POA is!
Of course, understanding the basics is key to get a clear picture of what a financial DPOA is. Just to give a short recap (because we’ve already talked about it thoroughly here), POA is short for power of attorney, and it’s an estate planning tool where you authorize someone else to act on your behalf.
When you execute one, the person you grant the POA to becomes your agent–pretty much like an extension of your personality. He or she gets to act and decide for you (generally in times of incapacity), and this is exactly why you need someone trustworthy for this role!
Wait–what’s the D in DPOA?
Now that that’s out of the way, let’s talk about durability. (Ring a bell??)
Yes, durability is what the D in DPOA stands for, and yes, it’s something you have most likely encountered before. (Especially if you’ve been following me here!)
A durable POA is a kind of power of attorney that continues to be effective even if you become incapacitated to handle matters on your own. Unlike a non-durable POA that automatically ceases to become effective when the principal (that is, the person who executed the POA) loses capacity, a DPOA remains in force during–and despite–incapacity.
This, actually, is the selling point of a Financial DPOA. Your financial transactions carry on, precisely because your financial agent does not lose his/her authority to act for you should you become incapacitated. Durable, indeed!
What’s the financial agent expected to do?
Now that you have a Financial DPOA in place, what now? What’s your chosen financial agent going to have to do on your behalf?
The answer is going to be completely up to YOU.
Being the principal of this relationship, it’s up to you how you want to limit your agent’s authority. You can grant as much or as little power as you think is proper, and as much or as little as what you think you need depending on your finances and pending transactions.
Among the many financial powers you can ask your agent to do in your POA document are:
Pay your bills (medical expenses, utilities, loans, etc.)
Settle your taxes and other unpaid contributions
Collect payment and benefits on your behalf
Manage your assets (including allowing your agent to transfer/sell your properties)
Access your accounts
Resume the operation of your business
Again, this list is not exclusive! You can give your financial agent other responsibilities that you may deem are appropriate based on your financial circumstances. Your Financial DPOA, your call!
And that is it on the topic of Financial DPOA!
Feel like you need one? Or already have one but feel like it needs a few tweaks? Whatever your Financial DPOA needs are, I’m here to help! (You may also need a Healthcare POA; learn more here!)
No worries—this is going to be casual, no pressure, and absolutely free!
Looking forward to hearing from you and, eventually, coming up with a Financial DPOA for and with you!