The Most Important Estate Planning Document

November 01, 2017 by John Zabkowicz

As Attorney Ruthmansdorfer highlighted in her last blog, the Last Will and Testament is an essential estate planning tool and must be used in coordination with other documents, including beneficiary designations, to properly and effectively transfer assets at someone’s death.  It truly is an important estate planning document.  While that person is living, however, it is even more essential that the person has a valid financial power of attorney document.  In my opinion, the financial power of attorney is the most important estate planning document that a person can possess.

What exactly is a financial power of attorney?  A financial power of attorney is a document that appoints someone to act as your financial agent, or to have legal authority over your finances on your behalf.  You can have the person that is nominated to act immediately or upon your incapacitation.  You can allow that person to pay your taxes, pay your bills and other expenses, collect your social security or other government benefits, and, if necessary, that person can even buy and sell real estate on your behalf.  The nominated agent must maintain accurate records and act in your best interests.  If you ever become incapacitated, this document, along with a valid health care power of attorney document, generally avoids the need for any guardianship proceedings.

Because this document is such an important estate planning tool, we recommend that you nominate someone that is close to you, such as a spouse, child, or close relative.  We often see too many abuses from nominated agents who generally do not act in the best interests of the person who created the power of attorney.  That is why, when naming your financial power of attorney, it is imperative that you nominate someone you can trust and someone you can truly depend on.  That nominated agent will have significant control over your finances and will be making financial decisions that will affect your everyday life.

Attorney John P. Zabkowicz