Although none of us expect that we might not be able to manage our affairs later on in life, it is still important to plan out a contingency just in case circumstances like old age, a catastrophic injury, or loss of mental capacity takes over our abilities to act for ourselves. One important piece of planning folks can engage in is making sure they have a power of attorney in place to allow a trusted individual to manage their finances for healthcare and lifestyle decisions to ensure they live our their golden years with dignity.
By creating a financial power of attorney, one can allow another person to act on his or her behalf in a number of different ways including making deposits or withdrawals at the bank, manage Medicare and other government benefits, and look after financial investments. Because income and finances are such an important part of our lives, these areas need constant oversight to make sure there are no disruptions that could negatively affect our standards of living.
Under New York law, competent individuals are allowed to act on behalf of someone else to help manage finances. While it is an added benefit that the person with financial power of attorney have legal or financial management experience, the law does not require these skills as a prerequisite and one need only choose a trusted individual to act on his or her behalf. Furthermore, the parameters of the power afforded to the person with the power of attorney will be entirely spelled out in the document granting such control.
The law allows individuals to create a financial power of attorney under a number of different circumstances. One practical way can be to create a document that grants specific financial powers of attorney in cases where a treating doctor determines that someone can no longer make decisions for himself or herself, often referred to as a springing power of attorney.
Financial powers of attorney can take effect immediately and last for as long or as little as the document spells out. Furthermore, these powers can be taken away at any time the testator deems fit, so long as he or she is competent to do so. Under New York law, financial powers of attorney terminate upon the passing of the testator and then give power of the estate to the individual named in the deceased’s last will and testament.