Financial Power of Attorney
A financial power of attorney is a document that gives your appointed agent the power to manage your finances. Your agent is a fiduciary. All adults should have a financial power of attorney that appoints an agent to manage their financial affairs in the event that they lose the ability to manage their own affairs. Failure to have this document in place prior to incapacity—even temporary incapacity—could result in the need for a costly and public guardianship and conservatorship court proceeding.
A power of attorney is a very powerful document. Consider using a private attorney or a Legal Services attorney who provides services to low-income individuals to create your power of attorney. Forms, such as those found on the Internet or distributed by other individuals or businesses, may not allow your agent to act on your behalf when necessary or may give your agent more power than is necessary to meet your objectives.
Your power of attorney should give your agent only the power needed to achieve your objectives. For example, you can choose to have the agent’s power become effective only after a physician certifies that you have lost the ability to manage your own affairs (called a “springing power of attorney”). You can include language in your power of attorney that instructs your agent to involve you in making decisions to the greatest extent possible, even if your abilities are impaired. Your power of attorney should state that the use of your money to benefit anyone but you is a crime, unless the document specifically allows the agent to use your assets to benefit someone else.
Adapted from Utah Commission on Aging Financial Security Guide (2007), published by AARP.