A power of attorney is a document by which an individual designates another individual to act on their behalf in financial matters. A power of attorney provides extensive powers to the person appointed to act. These powers usually include:
- Handling banking transactions
- Handling transactions involving U.S. securities
- Entering safety deposit boxes
- Buying, managing or selling real estate
- Purchasing life insurance
- Settling claims
- Maintaining and operating business interests
- Entering into contracts
- Employing professional assistance
- Exercising stock rights
- Making gifts
- Filing tax returns
- Handling matters related to government benefits
- Disclaiming interests
- Making transfers to revocable trusts
A power of attorney is an important tool in disability planning. Whenever a person is unable to handle financial matters, a power of attorney can be essential. A power of attorney can avoid the necessity of court proceedings to establish a conservatorship.
Because a power of attorney is not under the supervision of the court, it is very important to select a person whom you trust implicitly, who will act in your best interests, and upon whom you can rely to give full accounting of any and all transactions undertaken on your behalf. Unless a power of attorney provides otherwise, it is effective as soon as it is signed. A power of attorney results in another person having as much access and control over your finances as you have yourself.
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