Financial powers of attorney are one element within your estate planning package. According to FindLaw, within your estate planning package, you will have a living trust, wills, financial durable powers of attorney and healthcare directives. Financial powers of attorney are a document, which, in essence, say if you ever become mentally incapacitated, you will nominate people to make decisions for you. You may be 90 years old and suffering from Alzheimer’s, from dementia or in a coma, and thus incapable of making any decisions on your own.
If you have not done this power of attorney for finance, you do not want your loved ones to have to go to court and petition the court to get permission to make decisions. The whole idea here is to keep the court out and to make it a seamless transition. If something were to happen to you, the people of your choosing can go ahead and start to take control of your finances. They can pay your bills, file your taxes and keep your business running. They will have the legal authority to do so with this document.
You may choose to make a durable financial power of attorney come into effect immediately upon signing or only if you are deemed incapacitated. Several factors can determine incapacity. Sometimes a court of proper jurisdiction can deem you incapacitated. Alternatively, your primary care physician or two non-primary care physicians under oath can state that you are incapacitated. So, you would first have to be determined or considered to be incapacitated. Then, the power would shift over to the agent that you have nominated to be the durable financial power of attorney.