“We need to set up a new will.” I hear those words every single week across my desk from clients at our law office. But rare is the day when clients come in seeking, first and foremost, a new financial power of attorney.
A financial power of attorney is a document in which you name another individual to handle your money affairs. It is the single most important document you can have in your estate planning arsenal.
While a will is important, if you pass away without one, your assets will flow down to your next-o f-kin. Health care advance directives, including a health care power of attorney and living will, are useful as well. But if you have never signed them, medical personnel are generally permitted to look to your closest relatives for guidance. No such bail out substitute exists for a lack of a financial power of attorney.
If you become incapacitated, the financial institutions holding accounts in your name simply cannot work with your family members, even your spouse if he or she is not also on the account. No one will be able to cash in your assets to pay for care, or write checks for you. The only option at that point will be for your loved one to pursue a guardianship, which is an expensive and cumbersome court process – one that will render your health condition and finances as public records.
Do yourself and your family a favor. Meet with a competent elder law attorney and tell that counselor, “I need to set up a new financial power of attorney.” It could be the most important step you take to ensure your that loved ones can access and pay for the care you need.