FINANCIAL POWER OF ATTORNEY

After deciding on whether to utilize a revocable living trust or a last will and testament, it is important to know that every estate plan should contain a durable financial power of attorney.

There are many different types of financial powers of attorney.  Here is what you should look for.

DURABILITY

A durable financial power of attorney continues to be effective even after the preparer becomes incapacitated.  This, of course, is when it is most needed.  Without durability, the power of attorney will no longer be usable by the agent after you have been found to be incapacitated.

EFFECTIVE DATE

Financial powers of attorney can either be effective on the date it is executed or it can be effective only upon a determination of incapacity.

A power of attorney that is effective upon execution is called an "Immediate" power of attorney.  If the effective date is determined by incapacity, it is called a "Springing" power of attorney.  

Some powers of attorney are both immediate and springing.  Often when there is a designated spouse as the agent, that appointment will be immediate.  Successor agents may not have authority to act until a determination of incapacity is made.

You must be very careful with the preparation of a power of attorney.  Discuss this with us to be sure it is set up properly.

© 2020 by Keith R. Lyman LLC

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