Why Every Adult Needs a Financial Power of Attorney

Every adult should have a Financial Power of Attorney in place. This essential document ensures that someone you trust can manage your financial affairs if you become incapacitated—without the need for costly court involvement.

Here’s what you need to know about this powerful tool, and why it’s a critical part of your estate plan.

What Is a Financial Power of Attorney?

A Financial Power of Attorney is a legal document that allows you to appoint someone—known as your agent or attorney-in-fact—to manage your financial matters if you are unable to do so yourself.

When Does It Take Effect?

Powers of attorney can be drafted in one of two ways:

• Effective Immediately: Your agent can act on your behalf as soon as the document is signed.
• Springing Power: The document only becomes active when you are declared incapacitated by a physician.

For many people, choosing an immediately effective power of attorney simplifies things. It avoids the delays and emotional toll of needing a doctor’s certification before your agent can step in to help.

How Is a Financial Power of Attorney Used?

Using a Financial Power of Attorney is straightforward:

• Your agent presents a copy of the document to the financial institution, utility provider, or creditor.
• If the document is properly drafted, the institution will accept it, and your agent can act on your behalf.

For example, your agent can be added to your bank account to help pay bills or deposit funds on your behalf.

Where Can It Be Used?

Most people think only of banks, but a Financial Power of Attorney can be used in a wide variety of situations, including:

• Banks and credit unions
• Investment accounts
• Utilities and service providers
• Insurance and tax matters
• Creditors and collections

A well-drafted document provides your agent the authority to handle all major aspects of your financial life.

What Can’t a Power of Attorney Do?

While powerful, this document does have limitations:

• It cannot change beneficiary designations on your accounts or policies (unless expressly allowed).
• It cannot sell or mortgage your home without specific language authorizing it.
• It cannot be used to make or change a Will, or to amend a Trust.

That’s why working with an attorney is so important—to ensure your document grants the appropriate level of authority.

What Happens If I Don’t Have One?

If you become incapacitated and do not have a Financial Power of Attorney in place, your loved ones must go to court to have a conservator appointed.

In Kansas, conservatorship:

• Requires a formal petition to the district court
• Involves ongoing court oversight
• Can be expensive and time-consuming to manage

By contrast, a Financial Power of Attorney is a simple and cost-effective way to plan ahead and avoid court involvement.

Do Young Adults Need One Too?

Yes. Once your child turns 18, you no longer have legal authority over their financial matters—even in an emergency.

A young adult could:

• Be in an accident
• Study abroad
• Be hospitalized unexpectedly

A Financial Power of Attorney ensures you can help them when needed, without legal hurdles.

What Should I Do Now?

A Kansas Financial Power of Attorney is a key part of a comprehensive estate plan. At Minter & Pollak, LC, we create custom estate planning documents tailored to your needs and life circumstances.

📞 Call us today at (316) 265-0797 to schedule your free estate planning consultation and learn more about putting a Financial Power of Attorney in place.

Photo by micheile henderson on Unsplash.