Back to the Basics - Understanding Iowa Financial Power of Attorney
It is very important for Iowans, especially aging Iowans, to have their legal affairs in order, and to then review such plans periodically. Planning and memorializing now your own financial choices and health care decisions in the event of future contingencies ensures that your wishes are complied with, and in many cases reduces the burden on family and loved ones. When your needs and wishes are put in writing, it greatly reduces the risk that those closest to you will argue over what you would prefer, and you can have peace of mind, knowing that even if you are not able to advocate for yourself at some future point, your wishes will be followed.
What Exactly Does it Mean to “Get Your Legal Affairs in Order”?
There are many aspects to consider when you decide to have your legal affairs put in order by an experienced Iowa estate planning attorney. There is estate planning, living wills, traditional wills, advance directives, and powers of attorney. You can make any number of decisions related to your health care and your finances in the event of future illness, incapacitation, or death. A power of attorney is a planning document that allows you to direct events in the future if you become disabled. There are two main types of powers of attorney: a financial power of attorney and a health care power of attorney. Both are useful tools that ensure your affairs will be handled in accordance with your wishes if you become disabled or otherwise incapacitated. Health care power of attorney relates to your healthcare wishes, and is a subject all its own. Financial power of attorney relates to your financial decisions, and is a critical component to your financial legal planning.
Financial Power of Attorney
A financial power of attorney allows you to name another person to handle your finances at some future point if you need or want assistance. Many financial power of attorney documents become operative upon a doctor determining that you can no longer make decisions independently, but you can structure it however you want, including in a manner that activates the power of attorney at a certain set point in time.
Durable or Nondurable?
Durable means that something will last, while nondurable means the opposite. When it comes to financial power of attorney, most people want the power to be durable. That means it lasts even if you become completely disabled at a future point. However, if you do choose to create a durable financial power of attorney, it is imperative you pick a person you trust to give that power to. In most cases that person will not be supervised in any way, unless you ask the court to appoint a conservator to oversee your finances.
A court appointed conservator must file regular financial reports with the court, and seek court approval before making major financial decisions, such as selling your home. However, court resources are sometimes spread thin, and it can take more time to obtain court approval.
If you do not plan for the future and have a durable financial power of attorney, with or without a conservatorship, then your loved ones may have to hire an attorney to help you in the event you become incapacitated. This will take time and deplete your resources, and that is the last thing anyone wants to see happened to their hard-earned savings.
With offices in Des Moines and Cedar Rapids, the experienced estate planning attorneys at the Iowa law firm of Whitaker Hagenow & Gustoff can help you plan your estate in accordance with your wishes, in the most cost-effective manner possible. Call or email us today for an initial consultation.