FINANCIAL DURABLE POWER OF ATTORNEY
A Necessary Agreement to Protect Your Finances
What is a Financial Durable Power of Attorney?
A Financial Durable Power of Attorney (or FDPOA) is a necessary agreement in order to protect you and your finances in the event that you become incapacitated, and thus unable to manage your finances.
Contained within the agreement is the formal appointment of an individual - or "Agent" - who will be responsible for making financial decisions on your behalf for as long as you are unable to do so. Specific financial power authorized can run the entire range of your finances and can involve an array of financial authority - everything from only paying the bills to making investment decisions. It also includes giving your Agent authority to handle your digital assets, i.e. your online life. However, it is important that the agreement lays out, in as clear detail as possible, what sort of powers the Agent would have during the time that you are incapacitated.
It is important to note that your financial Agent can be the same person as your health care and mental health care Agent, or they can be different. However, if the two individuals are different, this can set up a potential conflict, as your financial and health care Agents may disagree on critical areas, like medical care and paying for medical bills. Thus, it is best to ensure that the two individuals are people who work well together and do not have any conflicts of interest which may compromise their judgment. Remember, the most important thing with the appointment of an Agent is that it is someone who will keep your interests - and your interests alone - at the forefront of their decision making process.
Who Can I Appoint As My Agent?
You can appoint anyone. But that doesn't mean you should appoint just anyone.
The person you appoint should fulfill three basic requirements.
First, they must be someone you place absolute trust in to fulfill your financial wishes and protect you. While you can leave instructions behind, those instructions may not be legally binding, and it is vital that the person you appoint be someone who will look out for your interests, and your interests alone.
Second, they must be someone who can handle the added strain of your affairs and juggle their life and your life at the same time.
Third, depending on the scope of authority given in the document, it should be an individual who has a basic understanding of finances and your views on investing and spending.
Why do I Need This?
No one ever wants to imagine that the time will come when they are incapable of managing their own finances. But, the simple truth is that this moment comes for far too many of us, and we are often unprepared. A Financial Durable Power of Attorney ensures that your interests are protected in the event that you are incapable of managing your own financial affairs. This will protect you from a slew of worst-case scenarios, including a wide range of financial problems that may await you upon your recovery.
How Does This Agreement Work?
In an ideal situation, the agreement would never need to be invoked at all. Having said that, let's say you are in a severe car accident, and incapable of managing your own financial affairs for weeks at a time. At this time, the agreement would come into effect. Depending on the specific duties laid out in the agreement, your Agent would work to manage your finances. This may include signing checks, paying bills, meeting with financial investors, managing your financial portfolio or any financial responsibilities. During this time, other agents, such as those named to make medical or mental health decisions for you, would be making those kinds of decisions for you.
When you regained consciousness and were to in a position once again to manage your own financial affairs, you would take over the management of your finances.
Arizona Durable Power of Attorney Guidelines
While there are forms available while will allow you to appoint someone your financial Agent, these forms often fail to fully understand complexities of Arizona-specific guidelines. These include:
- You must be mentally competent and understand what you are signing. The document may be changed as long as you remain competent, but you cannot revoke or amend it if you are not competent to do so.
- You must sign the agreement on your own, of your own free will, without being coerced.
- You must understand all aspects of what you are signing.
- The document requires a notary and witness, neither of whom can be the signer's spouse or children (the Agent can be either).
Failure to properly account for these guidelines and laws may result in your document being ruled invalid - an absolute worst-case scenario that we can help you avoid.
For more information, you may view these documents.