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How to Prepare a Durable Financial Power of Attorney

A durable financial power of attorney is designed to extend authority to another individual to manage the financial affairs of the person who creates the instrument. In order for a financial power of attorney to be legally effective, it must be prepared in a certain manner. Although the laws governing financial powers of attorney are matters of state statute, the requirements for preparing them are usually the same in all jurisdictions.

Selecting an Agent-in-Fact

The first step in creating a financial power of attorney is selecting what is known legally as the agent-in-fact. This is the legal term for the individual who will be granted authority to act in regard to certain financial matters on behalf of the person who creates the power of attorney.

The person designated as the agent-in-fact must be reliable and trustworthy. The agent needs to have a general knowledge of the types of financial matters that will need to be addressed via the power of attorney. Finally, the agent must have the time necessary to devote to dealing with the designated financial matters.

Drafting the Instrument

The reality is that standard durable financial power of attorney forms are fairly readily available. Many financial institutions maintain these forms for their customers or clients. In the alternative, many attorneys draft powers of attorney for their clients. However, they are not always sufficient. With that said, the best course to take when in need of a durable of a durable financial power of attorney is to seek legal assistance. Oftentimes, an estate attorney will prepare this instrument as part of overall estate planning for a client.

Executing the Instrument

Properly executing, or signing, the completed durable financial power of attorney is crucial. The failure to follow the legal requirements associated with its execution render the power of attorney ineffective.

The signing requirements vary from one state to another. Therefore, it is important to confirm what is necessary in your jurisdiction. At a minimum, the instrument must be signed by the person who creates the power of attorney in front of a notary public. Some jurisdictions require witnesses to the signing.

Maintaining the Power of Attorney

The original durable financial power of attorney signed by the creator must be provided to the designated agent-in-fact. The agent-in-fact will be called upon to present the original document when dealing with various financial matters.

A person needs to be proactive when contemplating situations in which assistance with finances might be necessary. A durable financial power of attorney is an ideal tool to ensure a person’s financial interests are protected and properly managed.