When it comes to finances, it is important to have a plan that will authorize someone to pay the bills while you are away, or if you become mentally or physically incapacitated. In this age of identity theft and fraud, a written plan will guide a family member to distinguish valid bills from fraudulent claims. But, the best of plans will be for naught if you have not executed a durable power of attorney. Identity theft has forced banks and 401K administrators to impose security measures that will seek greater proof from anyone seeking to use or change the account, even if it is for your benefit. Consider the time when you contacted a credit card company regarding an account in your name and the credit card company needed to speak only with you. You must give permission to the credit card company to discuss your account with anyone else.

Designating someone you trust with the power of attorney will enable them to pay bills, file tax returns, instruct 401K administrators, and coordinate your benefits from Social Security, Veteran’s Administration, or Medicare. Through a properly prepared and executed power of attorney form, you are appointing an individual as your agent. That individual could be your spouse, an adult child, a family member, a life partner or a friend. The agent can then step in and act on your behalf with regard to all of your finances, or a smaller range of powers that you are comfortable giving.

A power of attorney may be either durable or non-durable. A non-durable power of attorney remains effective only for so long as you are legally competent. A durable power of attorney remains effective after you are deemed legally incompetent. State laws determine what a power of attorney form must include so that it will be treated as durable, and allow our agent to conduct our financial affairs when such assistance is needed most.

The power of attorney form can be a valuable tool so long as it is properly prepared and executed before your time of need. If you become mentally or physically incapacitated without a power of attorney, your family may be required to go to court to have a guardian or conservator appointed. There is the chance the court may appoint a person other than who you would have chosen. The court must consider the arguments of all family members, including those may have been estranged for years. Family bickering and infighting can turn a guardianship appointment into a costly and protracted legal proceeding. So, protect your loved ones from unnecessary expense and hardship with Transition Plan’s durable power of attorney.