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Should I appoint a financial power of attorney?

Most people are aware of what a health care power of attorney can do. However, many people in Florida and around the country may not understand the importance of having a financial power of attorney.

According to the U.S. Consumer Financial Protection Bureau, a financial power of attorney is a good way to plan for future incapacity. It can also be a useful tool for money management. For example, elderly people may appoint an adult child as a power of attorney so the person can handle significant tasks related to finances.

The American Association of Retired Persons points out that this process can prevent heirs from going to court for financial matters. A financial power of attorney can do the following:

  •        Manage retirement accounts and real estate
  •        Claim inherited property
  •        Sell stocks
  •        Sign income returns
  •        Run a small business
  •        Access bank accounts

The principal can give the power attorney as much or as little responsibility as desired. The CFPB points out that it is important for people to make a financial power of attorney durable. This ensures that the person will be able to handle finances in the event that the principal becomes incapacitated. 

To appoint a financial power of attorney, you will simply need to fill out the proper paperwork. Some banks or brokerages may have specific forms to sign in addition to an attorney’s paperwork. Everything will need to be signed in front of a notary public.

While this information may be useful, it should not be taken as legal advice.

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