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In this article, associate attorney Adams offers an explanation of Wisconsin’s Power of Attorney for Finances and emphasizes its significance in a comprehensive estate plan.
Caution: This document discusses matters of death and severe medical trauma.
Life-changing events like car accidents or medical emergencies are not predictable, but you can take steps to ease the burden of everyone around you if you are ever left incapacitated. A Power of Attorney for Finances is one of several ways to make the unexpected less stressful. This article provides an overview of what a Power of Attorney for Finances can do and why it is such an important part of any worthwhile estate plan.
What is a Power of Attorney for Finances?
A Power of Attorney for Finances is an estate planning document which provides authority to a person, persons, or an entity to make financial decisions on your behalf. Depending on the powers granted within the document, your agent (the person whom you empower) can take most finance-related actions on your behalf, whether that is upon your request or because you are unable to take such action. For example, if you are unavailable because you are out of the country or incapacitated because you were in a car crash and your rent or utility bill is due, and your bank needs your permission to release funds, the bank could get that permission from your agent instead of you.
A Power of Attorney for Finances does NOT transfer power out of your hands. You always have the power to revoke the Power of Attorney document and to override your agent’s decisions as long as you have the capacity to make decisions for yourself. On top of that, your agent is required to consider your desires and to act in your best interest, which is referred to as the agent’s fiduciary duty.
A Power of Attorney for Finances ENDS AT DEATH. Power of Attorney documents are the written form of an ongoing grant of power over the affairs of a living person, from that living person, to another entity. As soon as the living person dies, that person can no longer be the source of an ongoing grant of power, so every power of attorney ends upon the death of the person who granted the power.
Why you should have a Power of Attorney for Finances.
As with all estate planning documents, a Power of Attorney for Finances is as much for you as it is for the people you love. It provides authority to someone who might otherwise not be able to act on your behalf without first seeking an order from a court. Handling someone else’s financial issues is hard to deal with under the best of circumstances. Certified professional accountants are certified for a reason. Without a valid Power of Attorney for Finances, navigating the obstacles around using your assets could be a nightmare for your loved ones.
Even with a valid Power of Attorney, your agent will likely face difficulties. Convincing institutions that your agent is actually your agent can be its own process at times. The Wisconsin Statutes require strict compliance with specific procedures in order to create a valid Power of Attorney document. Those requirements are meant to safeguard your rights to control your property and assets. Power of Attorney documents as described and provided by the Wisconsin Statutes only grant power within certain limits unless you specifically grant additional powers and specifically address any limitations.
Without a Power of Attorney for Finances, if you are unable to make financial decisions, no one can automatically step in to manage your accounts, whether a bank, spouse (if your accounts are not all jointly owned), or next of kin. Any issues that arise regarding your assets could lead to the need for court intervention. At that point, you may need to be placed into a guardianship of the estate wherein a court, instead of you, will grant someone power to make almost all of your financial decisions. Under a guardianship, you do lose a whole set of rights to make decisions for yourself. Furthermore, the process for establishing a guardianship is incredibly high pace and stressful for the people seeking it on your behalf.
Hopefully, you will never lose the ability to make your own financial decisions, but the possibility of your incapacity is what every estate planning attorney considers while drafting these documents. If you want to make life easier for your friends and family in such a case, you should have a Power of Attorney for Finances.
To learn more about whether a Power of Attorney for Finances is right for you, contact the estate planning professionals at West & Dunn. Visit our Contact Us page or call our main line at 608-535-6420 to get started.
