How a Financial Power of Attorney Keeps Your Assets Protected If You Get Sick
Everyone gets injured and ill during their lives. Everyone will eventually pass away, maybe even from an injury or illness. During these times of injury or illness, people can and do lose the ability to speak for themselves or become incapacitated in such a way that managing their affairs is no longer possible. In this article we’ll discuss how to protect your money, things and property if you get sick.
First, though, what does that word mean: protect? It means to safekeep. It means to keep something or someone from being harmed and ill-used. Protecting your assets (your money, your things and your property) comes down to you making sure your things, money and property are safely kept and used for your benefit of the benefit of those you love.
How can you protect your money, things and property? A power of attorney is one way.
What is a power of attorney and how does it protect your property?
A financial power of attorney authorizes a person of your choice to have access to your accounts and property and to act on your behalf. It gives that person legal authority, as if they are you, to decide how your things, money and property should be managed and spent. A durable financial power of attorney means the loss of your ability to speak for yourself or manage your property does not end the powers of the person you have designated as your agent. In fact, it means the opposite. Their powers keep going. Their powers are “durable.”
How does this protect your property?
First, it puts the person in charge YOU want in charge. You can decide who has the skill to handle your money because not everyone is good with managing money. You can decide who even has the knowledge of where your property is (i.e. what bank, what do you own, etc.). Not everyone opens up their portfolios and bank accounts to their entire family. In fact, it is very likely very few people in your family know all of this about you.
Because you have chosen the person who knows your life and has the capability to handle your affairs, you have more peace of mind and assurance your property will be safekept. It will be protected.
Second, a power of attorney is a legal document. There are laws that protect a person if the person they do choose doesn’t do what is best for the person who gives them the power. This is called “abuse” by a “fiduciary.” In short, the agent uses the property for the benefit of someone other than you. Look at it like a safety net under your power of attorney. Again, protecting your property.
Finally, if you do not name someone and a court decides you need someone in charge of your finances, they will name someone. This type of appointment is called a guardianship and/or a conservatorship. That does mean that a person will be in charge of everything you own (your money, property and things), but is it the person you would choose? Also, there are a lot of other things that come along with an appointment by a court, not an appointment through a power of attorney. Further, costs are higher with this type of appointment. Therefore, there is more chance that the monies will be used to pay for this appointment, rather than pay for needed things for you and your family.
The Benefits of A Financial Power of Attorney
As we discussed, there are benefits of setting up a financial power of attorney.
- Protecting your choice: Rather than someone else, like a judge or a family member, choosing who is in charge. You choose the person you trust and who has the knowledge to do what needs to be done with your property.
- Protecting your property: Your property will be handled like you would handle it more likely with a power of attorney. Because you have chosen (and even provided guidance to) the agent, there is a greater chance of safekeeping.
- Protect your family from guardianship proceeding: If a person needs to be named and you have not established a power of attorney, the court system will decide for you. This is called a guardianship/conservatorship in Georgia. This process can be lengthy and costly. Further, it means there are others involved in deciding who, what and how.
- Protecting your control: Most people fear losing control of anything, let alone their property. By putting in place a power of attorney, you protect your control.
Of course, these are just a few of the most important benefits of a financial power of attorney. Depending on your situation, the type of assets you maintain, and the nature of any investments you may have, there could be many more additional benefits. Not to be underestimated is the ability to preserve your privacy, that of your family, and the confidentiality of your business dealings by not needing a public official or agency to step in and make determinations on your behalf.
To learn more about how a financial power of attorney can protect you and your family, contact Atlanta Wills + Trusts Law Group by Refeca Law LLC today.
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