Whether we choose to acknowledge it or not, it is possible that at some point in our lives, many of us may need assistance with financial planning or management. What form and shape this assistance will take can vary, but it can be as simple as some sound financial advice or it might that someone is needed to step in and help you manage complex financial affairs or transactions.
When financial situations present themselves to us in a manner that we are not fully capable of dealing with, due to lack of knowledge or incapacitation, it is important to understand that there are very helpful solutions available to us. Perhaps one of the most flexible solutions to finding financial management assistance is to form a durable power of attorney.
A power of attorney can be used for many different needs, including financial, medical and legal representation. Financially speaking, a power of attorney can be extremely useful in times when someone becomes incapacitated and cannot manage his or her own financial affairs. When this occurs, the affected person can appoint an agent to represent them in all their financial affairs while they are unable to manage them for themselves. Once they recover, the principal can revoke the durable power of attorney and resume management of their own financial matters.
A power of attorney template or POA form can be used to nominate a power of attorney to represent an individual and their affairs in several different areas should they become incapacitated.
Another scenario in which a durable power of attorney can be very beneficial is when an individual requires a skilled negotiator or financier to represent them when it comes to certain business or financial transactions. Many people have excellent business sense and the ability to operate their business in an efficient manner, but that does not always translate into being skilled in negotiation or financing techniques.
On the contrary, many business professionals devote so much of themselves to learning and running a business that negotiating is a forgotten skill. When situations like this arise, a power of attorney can be enacted that gives skilled negotiators the legal ability to negotiate business and financial transactions on your behalf. This ensures that when it comes to important financial discussions, you will always have professional representation on your side.
Once the decision is made to form a durable power of attorney, the most critical aspect is to choose the proper individual to become the attorney-in-fact. Whether the power of attorney becomes effective due to incapacitation or is formed to provide expertise during business negotiations or financial assistance, the key component is to have someone that is both trusted and qualified to perform as the attorney-in-fact.
If a principal becomes incapacitated, their agent becomes responsible for the financial management of their entire estate, so it is critical that the principal selects someone that is completely ethical and knowledgeable of the principal’s wishes.
If an individual or business seeks to hire a professional to assist with their financial affairs, it is vital that they fully investigate the credentials and references of the individual they wish to appoint as their agent. Due diligence requires that in order to fully protect their interests and finances, individuals and organizations must completely vet those who they would have represent them in these important financial decisions. Ensuring that an agent is actually qualified and knowledgeable enough to perform their required duties will prevent unwanted and possibly disastrous consequences that could arise in the future.
There are many financial transactions that can be managed through a power of attorney. If the principal is incapacitated, all of their personal financial transactions such as day-to-day banking and all other asset management can be handled by an attorney-in-fact. There are many principals who maintain a power of attorney that allows another individual to assist them in their everyday financial management simply because they don’t have enough time to do it themselves. To them, having someone they trust running the more mundane aspects of their financial estate will allow them to focus their attention on the more challenging aspects of growing their finances.
Many individuals, and businesses as well, grant attorney-in-fact privileges to individuals who maintain their investment portfolios, property management, tax accounting, securities, lending and credit acquisitions, as well as many other financial requirements. For individuals and businesses alike, there is no limit to the number of financial matters that can be managed by an appointed agent.
While an important legal instrument for assisting individuals who cannot act on their own, the power of attorney has evolved into a very powerful financial and legal tool that can be utilized to assist individuals and business owners who require skilled expertise when it comes to financial management and business negotiations. The power of attorney gives these people options to assist them in the day-to-day operations of their personal and business affairs, as well as provide skilled financial and business advice as it is needed. The power of attorney gives individuals flexibility and capabilities that they might not have at their disposal by themselves.
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