Many people focus their estate planning efforts on what will happen after their death, but this focus can leave their plan incomplete. If illness or injuries leave you unable to manage your own affairs, powers of attorney could be key to protecting your financial health.
What do powers of attorney allow your agent to do?
Depending on the terms of your document, a power of attorney can give your representative a wide variety of powers. The Illinois Power of Attorney Act specifies that power of attorney for property allows your agent to manage a specific list of tasks. These include:
- Purchasing or selling property on your behalf
- Filing your taxes
- Collecting debts and paying bills
- Applying on your behalf for government benefits or managing those Social Security, unemployment or military benefits
- Accessing and using your bank accounts
- Making investment decisions
- Hiring an attorney
- Managing your retirement plan
While your power of attorney can take a variety of actions on your behalf, they cannot alter your will.
Choosing the right agent is essential.
A power of attorney gives your agent power over your finances and your property. Choose an attorney-in-fact that you trust not to misuse that power. Speak to the person you choose—whether that person is your spouse, your friend or a member of your family—about your wishes to ensure that they know your wishes.
As Forbes notes, naming two agents could be another way to protect your property because they can keep each other in check.
By choosing your agent-in-fact carefully, you can establish protections for your finances and give yourself peace of mind.