If you have an accident or illness that leaves you incapacitated, who will manage your financial and legal affairs on your behalf?
If you are in a hospital in a coma, someone needs to be able to use your money to pay your mortgage, to deposit your paycheck into your bank account, or to apply for your disability benefits. Someone needs the legal authority to use your money to pay for your medication, to pay your doctor bills, or to pay your child’s tuition.
Under Virginia law, a durable financial power of attorney can answer these questions and save your family a lot of time and money. With a durable financial power of attorney, you can nominate who you want to manage your legal and financial affairs in the event of your incapacity. In doing so, your agent can begin managing your affairs as soon as you lose the capacity to do so yourself.
Here are some things to consider when deciding on who should serve as your agent(s):
Trust. You should only choose someone that you trust. Even though Virginia law protects against misuse of a power of attorney, the best protection is to choose people that will not be easily tempted in the first place.
Organization and communication skills. Your agent(s) should be able to maintain records of how they use your money, and they should be able to effectively communicate with people and businesses on your behalf. You can choose anyone you wish, but some people are better suited to this type of work than others.
For example: If you have an adult child that is an eccentric musician currently on tour in Germany, and you have another adult child that is an experienced accountant with a local bank, you should seriously consider appointing the accountant as your first choice under the financial power of attorney.
Proximity to your location. With modern technology, it is not necessary for your agent(s) to live nearby. Nevertheless, if you have two equally qualified choices, but one lives on the other side of the country, you should consider appointing the individual that lives closer as your first choice.
Preventing family discord and strife. If there is any chance that your family members will disagree about who should manage your affairs or about how your finances should be allocated for your benefit, you should consider choosing someone who will have the confidence to make the right decisions regardless of who is trying to pressure them otherwise.
This is another reason to execute a financial power of attorney before you need it. Without a durable financial power of attorney in place, any family disagreements will almost certainly be resolved in a circuit court during a conservatorship petition.
Please note: If you do not have a durable financial power of attorney in place before you become incapacitated, it becomes much more difficult for your family to assist you. In Virginia, after you lose capacity, it is too late to sign a power of attorney. Your family must petition the local Virginia circuit court to name someone as your conservator and/or guardian. This will take time and money. Importantly, a petition for conservatorship will always take more time and cost more money than executing a durable power of attorney before you need it.
To discuss a financial power of attorney or any other aspects of an estate plan, feel free to call the office for a free consultation: (757) 333-7529 or use the Contact page. We can discuss your specific situation and review all of your options.
Most basic estate plans are very affordable and can be accomplished without much hassle. But if you wait too long, you may find that it is too late.
Remember: You need an estate plan. The only question is whether you waited too late to create one.