A durable power of attorney for finances — or financial power of attorney — is a simple, inexpensive, and reliable way to arrange for someone to manage your finances if you become incapacitated (unable to make decisions for yourself).
A financial power of attorney is a good document to make for yourself, but it can also be a great blessing for your family. If you become unable to decide for yourself and you haven’t prepared a durable power of attorney, a court proceeding is probably inescapable. Your spouse, closest relatives, or companion will have to ask a court for authority over at least some of your financial affairs.
A financial power of attorney can be drafted so that it goes into effect as soon as you sign it. (Many spouses have active financial powers of attorney for each other in case something happens to one of them — or for when one spouse is out of town.) You should specify that you want your power of attorney to be “durable.” If you don’t, in most states, it will automatically end if you later become incapacitated.
Or, you can specify that the power of attorney does not go into effect unless a doctor certifies that you have become incapacitated. This is called a “springing” durable power of attorney. It allows you to keep control over your affairs unless and until you become incapacitated, when it springs into effect.
When you create and sign a durable power of attorney, you give another person legal authority to act on your behalf. This person is called your agent or, in some states, your attorney-in-fact.
Commonly, people give their agent broad power to handle all of their finances. But you can give your agent as much or as little power as you wish. You may want to give your agent authority to do some or all of the following:
- use your assets to pay your everyday expenses and those of your family
- buy, sell, maintain, pay taxes on, and mortgage real estate and other property
- collect Social Security, Medicare, or other government benefits
- invest your money in stocks, bonds, and mutual funds
- handle transactions with banks and other financial institutions
- buy and sell insurance policies and annuities for you
- file and pay your taxes
- operate your small business
- claim property you inherit or are otherwise entitled to
- transfer property to a trust you’ve already created
- hire someone to represent you in court, and
- manage your retirement accounts.
The agent is required to act in your best interests, maintain accurate records, keep your property separate from his or hers, and avoid conflicts of interest.
What follows is a form legal in Missouri:
missouri-financial-durable-power-of-attorney-formForms for other states can be found here