A serious illness or sudden injury can leave you unable to manage your own finances. Bills still need to be paid, bank accounts still need attention and property expenses do not stop. Without a plan, your family may face delays or court involvement while trying to handle these responsibilities.
For Kent residents, planning ahead can provide a clearer path for managing financial matters during a period of incapacity. A power of attorney (POA) is one estate planning tool that may help address this concern.
A POA can name someone to help
A financial power of attorney can give a trusted person authority to take care of certain financial matters when you are unable to handle them on your own. The powers given to that person depend on the document and may include:
- Paying household bills and other expenses
- Managing bank and investment accounts
- Handling real estate transactions
- Filing or managing tax matters
- Collecting income or other payments
The person you name is generally called an agent. Choosing someone reliable matters because that person may gain significant authority over your finances.
In Washington, the terms of the POA can affect when the agent’s authority begins and what the agent can do. Creating the document while you have the legal capacity to do so may help avoid uncertainty later.
What happens without a plan?
Without a financial POA, a spouse or adult child may not automatically have authority to manage every financial matter on your behalf. A family member might need to seek court authority before handling certain responsibilities.
For example, if you become unable to manage your finances after a serious accident, your family may still need to pay your mortgage, manage your bank accounts or address property expenses. Having a properly prepared plan may make these responsibilities easier to handle.
Legal assistance can help you understand how Washington’s rules apply to your circumstances and how different estate planning documents may work together.
Planning before a crisis
Incapacity can happen without warning. Planning ahead can give you more control over who handles your financial affairs and how that person may act if you cannot make decisions yourself.