Estate planning is all about planning for the future and anticipating future events. A financial power of attorney is an estate-planning document that allows you to designate a person of your choosing to make financial decisions for you if you ever become disabled or incapacitated and can’t make those decisions for yourself. The person who executes the power of attorney is called the principal. The person who the principal designates to carry out the principal’s wishes is called the agent. Meaning one person (the principal) gives the authority to make their financial decisions over to someone else (the agent). A financial power of attorney can be revoked by the principal.
One great feature of a financial power of attorney is that the principal can determine when the agent’s power takes effect. If the principal wishes the power to take immediate effect, what’s called a standing power is created. On the other hand, many people want to retain the power to manage their own financial affairs, until and unless a certain event happens – e.g., if the principal becomes disabled or incapacitated. In those situations, the principal can make what is called a springing power, which means that the power only comes into effect upon the happening of the future event. Our attorneys can help you create a power attorney that meets your needs.
But creating a financial power of attorney is only one side of the story. When a financial power of attorney is executed, it creates a special kind of relationship between the principal and agent, called a fiduciary relationship. If you have received notification that you have been designated as an agent, it is wise to consult an Arizona estate planning attorney. The power of attorney document will set forth the agent’s duties and responsibilities in managing the principal’s financial affairs. And it is imperative that the agent read and understand the actual financial power of attorney document. In addition to those duties set forth in the power of attorney document, there are a number of other serious duties imposed by law (e.g., duty to avoid conflicts, duty to act in good faith and with competence and care, duty not to comingle funds, etc.). An agent can be held liable for breaching her duties to the principal.
The Tucson, Arizona estate planning attorneys at Lancer Law Firm, assist both principals and agents in a variety of financial power of attorney issues, ranging from drafting and reviewing documents, to advising parties regarding the fulfillment of their obligations and duties. If you have an issue concerning a financial power of attorney, call us today for a consultation by (520) 352-0008