A financial power of attorney (POA) in Texas grants an agent the authority to manage the financial affairs of the POA’s creator. This is an important document to set in place as part of the estate planning process because an agent can care for a POA creator’s finances if they become incapacitated.
It’s critical to understand the duties of a financial POA, as well as the characteristics to look for when you’re deciding who to name in this document. This can help to ensure that you make decisions that are in your best interests.
Duties of a financial POA
In the event of your incapacitation – due to illness, injury or advanced age – the agent you name will be responsible for managing your finances. This can include paying bills, managing bank accounts, making investments and handling tax matters. They may also have the authority to buy or sell property, enter into contracts and make decisions related to your retirement accounts, depending on the limitations that you outline in the document granting them this authority if/until you can again manage your financial affairs on your own.
The agent will be legally obligated to act in your best interests. They must manage assets prudently and avoid conflicts of interest. The agent should keep accurate records of all transactions and be prepared to provide detailed accounts of their actions.
Characteristics of a good financial POA
The agent you choose should be trustworthy because they will have significant control over your financial matters. The chosen individual should have a strong sense of integrity and be committed to acting in your best interests at all times.
They should have a solid understanding of financial management and be capable of handling complex transactions. Experience in dealing with financial matters, whether through professional experience or personal proficiency, is highly beneficial. The ability to make sound decisions under pressure and manage finances effectively is crucial for ensuring your assets are well-protected and appropriately utilized.
Communication skills are also important. A good agent must be able to communicate clearly with you, other family members and any professionals involved in managing your affairs. This includes providing regular updates and being responsive to any concerns or questions that may arise.
A POA is only one component of your estate plan. Working with a legal representative who can get everything in order may make it easier to safeguard your interests, no matter what life brings.