Everyone Needs a Kansas Financial Power of Attorney

Every adult needs a financial power of attorney to allow your financial affairs to be taken care of after becoming incapacitated without costly court oversight.  Here is why a financial power of attorney is important and what happens if you do not have one when you need it.

What is a Financial Power of Attorney?

A financial power of attorney is a legal document that allows someone else to manage your financial affairs for you if you are unable to do that yourself.  In that document you appoint an agent or attorney in fact and authorize them to oversee your affairs.

I can make my own decisions now, when does a financial power of attorney come into effect?

Powers of attorney can be drafted to become effective immediately or can spring into effect when you become incapacitated.  If you plan to appoint someone you trust to function as your agent, then it might be easier to have the power of attorney be effective immediately.  That way your agent does not have to have a doctor’s evaluation stating you are incompetent to use the power of attorney.  This can add time and stress to an already stressful situation.

How do you use it?

The wonderful thing about Financial Powers of Attorney is that they are quite easy to use.  Your agent simply provides a copy of the power of attorney to the bank, financial institution or other party that they need to deal with on your behalf.  If the power of attorney is properly prepared and addresses the issues your agent needs to deal with, then it will be accepted, and your agent can manage your affairs seamlessly. A simple example of this would be adding your agent to your bank account so that your agent can pay your bills and deposit money into your account for you.

Where can you use it?

While most people only think of using a financial power of attorney with a bank however there are numerous other instances when it can be used.  Your agent can handle matters related to banking, investment accounts, utilities, insurance, taxes, and with any creditor.  A well drafted power of attorney will give your attorney-in-fact wide ranging powers to transact business on your behalf. 

What are the limits to a Power of Attorney?

While a power of attorney grants a wide range of powers to an agent there are certain things that it cannot be used for.  It cannot be used to change any beneficiary designations on accounts or insurance, unless specifically provided in the document.  It cannot be used to sell or mortgage your home without specific language granting such power.  It cannot be used to make or revoke a will on your behalf or modify a trust. 

What happens if I do not have one?

A financial power of attorney provides a legal means for you to choose who to manage your bills and financial affairs without having to go to court.  In Kansas, if you are unable to oversee your financial affairs and you do not have a power of attorney, your children or other loved ones can petition the district court to have a conservator appointed for you.  The Conservator serves the same purpose as your agent under the power of attorney, but the entire process is overseen by the court.  This means that a conservatorship in Kansas can be expensive to set up and difficult to administer.

What about my young adult children?  Do they need a Financial Powers of Attorney too?

We think every adult needs a financial power or attorney.  A young adult could be in an unexpected accident or out of the country on an exchange trip.  If they are over eighteen, mom and dad no longer have legal authority to deal with their affairs and a power of attorney can be especially useful in certain situations.

 What do I do now?

 A Kansas financial power of attorney is just one part of a good estate plan.  Minter & Pollak, LC can help you put together your Kansas Financial Power of Attorney as part of a custom estate plan that fits your individual needs.  Give us a call today at 316-265-0797 to set up a free estate planning consultation.