What if you suddenly became unable to handle your investments and finances? Who would you trust with your financial matters? If you cannot answer that, then creating a financial power of attorney needs to be your priority for a good reason.
What is a financial power of attorney? It’s a powerful legal document that allows you to choose who can handle your finances in case of incapacity or unavailability. The good news is that experienced estate planning attorneys at Duncan Legal LLC can help you create a valid financial POA. Not only that, they can give you solid legal advice throughout the process.
This article explains Colorado’s financial power of attorney, how to make one and verify its validity, how it works, and why you need one.
Steps to Follow in Creating a Financial Power of Attorney in Colorado
Creating a financial POA in Colorado is fairly straightforward and usually goes as follows:
- Choose an agent and successor agents
Your agent is the person who will handle your financial decisions on your behalf. There are many things to consider before selecting an agent, including trust, competence, and willingness. You can also name one or more successor agents who will take over in case your attorney-in-fact is not able to act.
- Specify the powers granted and any restrictions or conditions
You can use a statutory form according to the guidelines of Colorado law or use online power of attorney forms. You can give your agent general or limited power to represent you in financial affairs. You can also specify when it takes effect and ends.
- Sign and date the document
You need to sign and date your power of attorney form before a notary public. Your agent does not need to sign the document.
- Have it notarized and witnessed
While Colorado law doesn’t have a notarization requirement for POAs, attorneys recommend it. You can ask the notary public who witnessed your signature to notarize your power of attorney in the presence of two or more witnesses. The witnesses then sign the document to provide further evidence of its validity. Your witnesses can’t be the agent you appoint or your family members.
- Store the original and give copies to your agent and others
Safekeeping the original documents is crucial for future access. Give copies to your agent, successor agent, and bank or other financial institutions.
A POA must meet the state’s requirements to be valid. An experienced estate planning attorney at Duncan Legal LLC can guide you through the process and make sure your financial POA covers all your needs and is valid.
Benefits of a Financial Power of Attorney
There are several benefits that you get with this legal document. It allows your agent to assist you with the following tasks:
1. Protecting your finances from mismanagement
If you become incapacitated, someone else can take advantage of your situation without your consent. A financial power of attorney can prevent this by giving your agent the legal authority to act for you and safeguard your interests.
2. Ensuring your bills and obligations get paid on time
You may face late fees, penalties, or legal actions if you cannot pay your bills or debts due to illness, injury, or absence. A financial POA can help you avoid the consequences of late payments by allowing your agent to pay your bills and obligations on your behalf.
3. Reducing conflict among your family members
Your family may argue or fight about who should manage your estate and how. A financial POA can reduce this conflict by clearly stating what you want and having a trusted person carry out your wishes.
4. Saving time and money in court proceedings
If you do not have a financial POA and become unavailable, your family may have to go to court to get a conservatorship over you. It can be a lengthy, costly, and invasive process that may not reflect your wishes. A financial POA can save you and your family time and money by avoiding the need for court intervention.
How Do I Know if a Financial Power of Attorney Is Valid?
Here are some factors to consider:
- Capacity and consent of the principal: You need to be of sound mind when creating your power of attorney.
- Compliance with statutory form and content: You need to follow the legal requirements for creating a valid Colorado power of attorney. It means you can use a legal form that lists the powers you want to give. You also need your signature acknowledged by a notary public and witnesses.
- Recognition by third parties: Your agent has to present your POA form to the financial institutions you transact with, such as banks. They may require your agent’s authority or proof of their identity.
Why Do You Need a Financial Power of Attorney?
You may need a financial POA for various reasons, such as:
- Traveling abroad and needing someone to handle your bills and taxes at home
- Inability to manage your estate and real property
- Planning for the future and avoiding the hassle and cost of a court-appointed guardian
A financial power of attorney can give your agent the power to handle these for you. They decide on your behalf, depending on your needs and desires.
Difference Between a Financial Power of Attorney and a Medical Power of Attorney
A financial POA permits a trustworthy agent authority to manage your finances. They can include paying bills, estate planning, managing investments, or selling property.
A medical power of attorney, however, grants healthcare powers to your agent. It allows them to make medical decisions for you when you cannot do so. Your agent can consent to or refuse treatments on your behalf.
Financial power of attorney has some key features and limits, such as:
- It can be general or limited in scope, depending on what powers you grant to your agent.
- It can be durable or springing.
- It imposes fiduciary duties on your agent.
Contact Duncan Legal LLC
Financial power of attorney is vital for planning and protecting your future. It lets you choose someone to handle your financial business on your behalf when you are no longer able to do that.
Duncan Legal LLC’s estate planning attorney in Centennial will help you create a valid financial POA document and advise you on your rights. We have the knowledge and expertise to help you draft the financial power of attorney that works for you.
Can You Revoke a Financial POA?
Yes, a financial POA can be revoked any time the principal wishes. To revoke a POA, you can simply send the agent a notice of revocation and deliver copies to anyone with a copy of the POA.
Does a Financial POA Expire?
As all POAs are durable unless the document states otherwise, they don’t automatically expire unless the principal passes.