How to Choose the Right Financial Power of Attorney

Key Factors to Consider when Choosing a Financial Power of Attorney under Texas Estates Code 752

When planning your estate, selecting the right person to serve as your financial power of attorney is one of the most important decisions you will make. This individual will be responsible for managing your finances if you are unable to do so yourself, so it’s essential to choose someone trustworthy and capable. Here are the key factors to consider when choosing a financial power of attorney.

Trustworthiness and Integrity

The person you choose as your financial power of attorney will have access to your bank accounts, investments, and other financial assets. It’s crucial to select someone who is completely trustworthy and has a strong sense of integrity. This person will need to act in your best interests, managing your finances as you would if you were able.

Financial Literacy

Your financial power of attorney should have a good understanding of financial matters. This doesn’t mean they need to be a financial expert, but they should be comfortable handling money, paying bills, managing investments, and dealing with taxes. If your financial situation is complex, you may want to consider someone with more advanced financial knowledge or consult with a financial advisor.

Availability and Willingness

Being a financial power of attorney can be a time-consuming responsibility, especially if your financial affairs are complicated. It’s important to choose someone who has the time to devote to managing your finances and is willing to take on the responsibility. Before naming someone as your financial power of attorney, have an open conversation with them to ensure they are both willing and able to take on this role.

Proximity

In some cases, it can be helpful to choose a financial power of attorney who lives nearby. While it’s not a strict requirement, having someone close can make it easier for them to handle tasks such as visiting banks, meeting with financial advisors, or managing your property. If you choose someone who lives far away, consider whether they would be able to handle these responsibilities remotely or if frequent travel would be necessary.

Understanding of Your Wishes

The person you select as your financial power of attorney should have a clear understanding of your financial goals and how you want your assets managed. This can include everything from how to handle your day-to-day expenses to making decisions about long-term investments. It’s essential that this person respects your wishes and is committed to carrying them out.

Consider a Backup Financial Power of Attorney

It’s wise to appoint a backup financial power of attorney in case your primary choice is unable or unwilling to serve when needed. This can provide peace of mind, knowing that there is a secondary person who can step in if necessary.

Professional Financial Power of Attorney

If you don’t have someone in your personal life who meets these criteria, or if your financial situation is particularly complex, you might consider appointing a professional financial power of attorney. This could be a financial advisor, attorney, or trust company. While there may be fees associated with this option, it can ensure that your finances are managed by someone with the necessary expertise.

Conclusion

Choosing the right financial power of attorney is a critical part of your estate planning process. By carefully considering these factors, you can select someone who will manage your financial affairs responsibly and in accordance with your wishes. Whether you choose a trusted friend, family member, or professional, the most important thing is to make a choice that gives you confidence in the management of your finances should you be unable to do so yourself.