What Should You Know About Financial Power of Attorney?

Whether you’re a business owner or just someone who wants to make sure you’re protected against unforeseen circumstances, it’s important to understand the implications of a financial power of attorney.

In general, power of attorney is something you should always have in place, regardless of your age or your present financial situation, because it provides a great deal of protection for you if you’re part of an accident or facing illness.

Power of attorney can be particularly important for entrepreneurs and business owners so that you can make sure not only your personal finances, but also the operations of your business are taken care of if you’re incapacitated for any reason.

The following are some of the basic, key facts to understand about a financial power of attorney.

Why Do You Need A Power of Attorney?

In the most general sense, a power of attorney is beneficial for everyone, not just business owners, because it outlines someone that you trust to handle your affairs if you’re incapacitated. There are healthcare and financial power of attorney documents, so you may have the same person or a different person assigned to handle each aspect of your affairs.

A durable power of attorney can ensure that you have someone in place that you believe can manage the task of managing not just your personal money, but also your small business or your investments.

When Is It In Effect?

There are two primary routes that you might take when you’re working on a financial POA, in terms of when it would go into effect.

One option would be to create a POA that only goes into effect based on a possible future event that leads to your incapacitation.

On the other hand, if you’re creating a POA with your spouse, for example, it can go into effect as soon as it’s signed.

This can be preferable for many people, and in particular, entrepreneurs, because it allows their spouse to act on their behalf for things they just simply can’t be there for, even if they’re not incapacitated in any way.

What Can Your Agent Do?

Depending on the specifics of your POA, when you assign an agent who can legally handle your affairs, they may be able to attend to any number of financial situations on your behalf. This can include things like real estate transactions, managing the operations of your business, tax issues, taking care of claims and litigation, and anything dealing with banking and financial institutions you work with.

It’s for this reason that not only having a POA is so important, but so is choosing the right agent if you’re a small business owner.

As mentioned above, financial POAs can also be useful for entrepreneurs to have since they let someone else take over if you can’t be there for certain business transactions.

If you’re a business owner and don’t have a financial POA, it could be wise to talk with an estate lawyer who handles these issues to make sure your personal and business finances and operations are protected.

Author:.

Carmelo is a marketing writer and blogger helping small and medium size businesses craft winning content strategies. She's always scouting the web for new social media strategies and is slightly addicted to apps. When not tapping the keyboard, you are likely to find her in the park playing with her uncontrollably friendly Irish setter or trying out new vegan recipes.

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