In recent weeks, we've talked several times about the administration of your estate after you pass away, but in some cases, you might need assistance administering your finances while you are still alive. If you are ever incapacitated by injury or health issues, even temporarily, you might need someone to take over the helm of your financial issues. The person you choose to handle such matters must be given power of attorney over money matters so he or she can act and make decisions on your behalf.
This is a big responsibility, so you never want to choose someone lightly. The person you select will have access to your financial information and funds, and depending on your situation, he or she might represent you in financial or business dealings during the time you are incapacitated. You'll want to choose someone who is responsible, willing to learn about your wishes and most likely to carry out your wishes.
The abilities of the power of attorney are limited by the laws of the state and by the power of attorney documents in your estate plan. Some functions that a power of attorney might perform include paying bills or taxes on your behalf, managing real estate assets or financial accounts, paying or negotiating regarding medical bills and reviewing financial accounts for errors or issues. They might also collect and deposit benefit payments or paychecks, make investments, buy insurance or sell or transfer assets -- all on your behalf and hopefully in your interest.
Working with an estate law attorney, you can create a power of attorney document that provides limitations you are comfortable with. A lawyer can also help you understand what traits to think about when selecting someone to be your POA.
Source: FindLaw, "Durable Financial Power of Attorney," accessed May 20, 2016