Guiding Clients Through Important Financial Decisions

When you are in an accident or dealing with a significant medical issue, having to keep track of financial accounts and pay bills can add an extra layer of stress. But there is a way to designate someone as your representative for these matters, and it’s called a financial power of attorney.

If you’re ready to set up a financial power of attorney or you still have some questions about the process, call MMZ Law to find out how we can help. Our experienced attorneys can explain to you what a financial power of attorney is and how one could be beneficial for your situation.

What Is a Financial Power of Attorney?

A financial power of attorney — also referred to as a financial POA — is a legal document that gives another person the power to make financial decisions on your behalf. A financial power of attorney can be set up for several reasons. If someone is deployed or is going to be overseas for an extended amount of time, setting up a financial POA can make it easier to ensure that their financial matters are under control.

A power of attorney may also be put in place in advance as a precaution for if and when someone becomes incapacitated, such as through an accident or from dementia or other cognitive decline as they get older.

The financial power of attorney is able to pay your bills, move money around between accounts, write checks, and buy or sell stocks. They can also sign legal documents on your behalf that relate to your finances.

Who Can Be Appointed to Oversee Someone’s Financial Matters in California?

The only requirement for someone to be appointed as a California financial power of attorney is that they be at least 18 years old and mentally competent. However, there are many other considerations when you’re deciding who should have access to your financial matters. Anyone you appoint as a financial power of attorney should be someone that you trust to make financial decisions on your part.

In many cases, this is a loved one, such as a spouse, sibling, or adult child. But it can also be an attorney, your accountant, or a friend. In general, it’s best if the person is local so that they can easily sign paperwork and visit bank branches and financial offices if necessary.

What Are the Different Types of Financial Powers of Attorney?

While a financial power of attorney is one legal document, there are a few different ways it can be set up, depending on your needs.

  • General power of attorney: A general power of attorney grants the broadest level of permissions. Someone with a general financial power of attorney can act on your behalf in any and all financial affairs. The exception to this is you become incapacitated. In this event, the financial POA is rendered void.
  • Limited power of attorney: A limited power of attorney allows you to grant specific permissions without providing access to all of your finances.
  • Durable power of attorney: A durable power of attorney is similar to a general power of attorney except the permissions don’t end when you become incapacitated. If you want to make sure that someone is able to handle your finances if you have a medical emergency and can’t make your own decisions, you will need a durable financial POA.

If you’re not sure which type is the best for your situation, an attorney can help.

Does Someone Have to Have Access to All of My Financial Affairs?

It’s normal for the idea of giving someone access to your financial decisions and affairs to be overwhelming. But it’s important to note that naming someone as a financial power of attorney doesn’t mean that you have to give them unlimited access to your accounts. With the right legal guidance, it’s possible to create a financial power of attorney with strict parameters.

For example, you may only grant someone permission to conduct real estate transactions on your behalf. Or the power of attorney could be limited to writing checks to pay your bills. You can also limit the power of attorney to a specific timeframe, such as if you were going to go on a year-long cruise.

Can a Financial Power of Attorney Be Changed or Cancelled?

Absolutely. As long as you remain mentally competent, you have the ability to change or cancel the power of attorney at any time. In California, you can cancel a financial POA by signing a legal document known as a revocation form. This document needs to be filled out correctly and notarized, so it’s a good idea to talk with an attorney before you start the process to ensure it’s done in compliance with the law. You will also need to notify the person who was acting as the power of attorney.

What Happens If I Don’t Have a Financial Power of Attorney?

If you don’t have a durable financial power of attorney and something happens to you, someone may have to be chosen and appointed by the courts. In many cases, this may be someone who you don’t want to have access to your financial transactions or financial institutions. Having a financial power of attorney set up ensures you have control over this important decision.

An estate planning lawyer, like those at MMZ Law, is qualified to help you set up a financial power of attorney that fits your needs and provides you with peace of mind that your money matters will be taken care of if you aren’t able to make decisions. Call 909-347-7444 to set up an appointment to get started.