Who Would Handle Your Finances If You Suddenly Couldn’t?
Most people do not expect to lose the ability to handle their own finances. But an accident, serious illness, or unexpected medical event can change things quickly.
If you could not manage your finances tomorrow, who would pay your mortgage? Who could access accounts to pay your bills? Who could handle insurance paperwork, taxes, or other important financial matters?
Many people assume their spouse or another family member could simply step in. That is not always the case.
A Durable Power of Attorney for Finances allows you to choose someone you trust to act on your behalf. Instead of leaving your family unsure about what they can legally do, you can put clear authority in place ahead of time.
At Margerie Law, we help individuals and families in Wauwatosa, Elm Grove, Brookfield, Milwaukee, and surrounding Wisconsin communities create estate plans that prepare for the unexpected.
A Durable Power of Attorney Gives You Control
A Durable Power of Attorney is about having a plan while you are still alive.
You choose a trusted person, called your agent, and give that person legal authority to handle certain financial matters for you.
Depending on how the document is written, your agent may be able to pay bills, manage bank accounts, handle investments, deal with real estate, sign certain documents, work with financial professionals, or take other financial actions on your behalf.
The word “durable” is important. It means the authority can continue if you become incapacitated and cannot manage your affairs yourself.
You are making the choice ahead of time about who you trust to help you.
Why Do I Need a Durable Power of Attorney If I’m Healthy?
This is one of the most common questions we hear. You may be young, healthy, working, raising children, and managing your own finances without any problems. A Durable Power of Attorney may not feel urgent.
But that is exactly when you want to create one. You generally want to make these decisions while you are healthy and able to clearly choose the person you trust.
A Durable Power of Attorney is not only for older adults. A serious accident or illness can affect someone at almost any age.
For young families, it can be especially important. Your household may depend on two incomes, and each spouse may handle different responsibilities. If one person suddenly cannot manage those responsibilities, the other spouse may need legal authority to act.
Planning now can make a difficult situation much easier for your family later.
What Could Happen Without a Durable Power of Attorney?
Imagine that you are seriously injured and cannot manage your financial affairs for several months.
Bills still arrive. The mortgage still needs to be paid. Insurance issues may need attention. Tax documents may need to be signed. Financial accounts may need to be managed.
Your family may know exactly what you would want them to do, but knowing your wishes does not automatically give someone legal authority to act for you.
Without the right planning, your loved ones may need to consider a court process to obtain authority to handle certain matters.
That means additional time, stress, and expense during a period when your family is already dealing with enough. A Durable Power of Attorney can help provide a much clearer path.
What Can Your Agent Do for You?
A Durable Power of Attorney can give your agent broad financial authority, or it can be written with limits based on your needs.
Depending on your plan, your agent may have authority to:
- Manage bank accounts
- Pay bills and household expenses
- Handle certain real estate matters
- Manage investments
- Work with accountants or attorneys
- Handle tax matters
- Manage certain business interests
- Deal with insurance and financial paperwork
This can be a significant amount of responsibility.
That is why choosing your agent is just as important as creating the document itself. Your estate planning attorney can help you think through which powers make sense and how much authority you want your agent to have.
Who Should You Choose as Your Agent?
Choose someone you trust completely. Your agent may have access to sensitive financial information and significant authority over your property and finances. For many people, the first choice is a spouse, adult child, sibling, or close family member.
But being related to someone does not automatically make that person the right choice.
Ask yourself whether this person is responsible with money. Consider whether they stay calm when problems arise. Think about whether they have enough time to handle the responsibility and whether you trust them to follow your wishes rather than their own.
You should also consider naming an alternate agent. If your first choice becomes ill, moves away, passes away, or cannot serve for another reason, an alternate can step in.
The goal is to choose someone who will protect your interests when you need help the most.
Financial Power of Attorney vs. Healthcare Power of Attorney
These documents are easy to confuse, but they serve different purposes.
- A Durable Power of Attorney for Finances deals with financial and legal matters.
- A Power of Attorney for Health Care deals with medical decisions if you cannot make those decisions yourself.
For example, your financial agent might handle your mortgage payment or banking. Your healthcare agent may communicate with doctors and make medical decisions based on the authority provided in your healthcare planning documents.
You may choose the same person for both roles, or you may decide that different people are better suited for each responsibility. For many families, both types of planning are important parts of a complete estate plan.
Does My Spouse Automatically Have the Power to Handle Everything?
Being married does not necessarily give your spouse unlimited authority to act for you in every financial situation. This surprises many couples.
You may share a home, bank accounts, children, and household expenses. But certain accounts, property, contracts, or transactions may still require specific legal authority.
That is why married couples should not assume that a marriage certificate replaces a Durable Power of Attorney.
Creating the proper documents can give both spouses clearer authority and reduce uncertainty if one of them becomes unable to manage financial matters.
Does a Durable Power of Attorney Replace a Will?
No. A will and a Durable Power of Attorney serve different purposes.
Your Durable Power of Attorney generally provides authority while you are alive. That authority ends when you die.
Your will provides instructions for what should happen after your death, including how certain property should be distributed and who should serve as your Personal Representative.
That is why a complete estate plan may include both documents. One does not replace the other.
Can I Change My Durable Power of Attorney Later?
Your life will change, and your estate planning documents may need to change with it.
Maybe the person you originally named as your agent is no longer the right choice. Perhaps you got married or divorced. Your children may now be adults. Your finances may have changed significantly.
These are all good reasons to review your Durable Power of Attorney.
As long as you have the legal capacity to do so, you can generally make changes or revoke your existing authority. You should also make sure that banks, financial professionals, and other relevant parties receive updated information when necessary.
An estate planning attorney can help you update the document properly and reduce the chance that an old version creates confusion.
When Should You Review Your Durable Power of Attorney?
You do not need to think about your Durable Power of Attorney every month. However, it should not sit untouched for decades either.
Consider reviewing it after major changes such as marriage, divorce, the death of an agent, a major change in your finances, a move, or a change in your relationship with the person you selected.
Even without a major event, an occasional estate plan review can help confirm that your choices still make sense.
Ask yourself one simple question: Would I still choose this person today?
If the answer is no—or you have to think about it for a long time—it may be time to update your plan.
Common Durable Power of Attorney Questions
Will I lose control of my finances when I sign a Durable Power of Attorney?
Creating a Durable Power of Attorney does not mean you automatically give up control of your own finances. The document gives your chosen agent authority based on its terms. You should discuss when that authority begins and what powers you want to provide with your attorney.
Can I name more than one person?
Depending on your plan, you may have options for how agents are named. However, adding multiple decision-makers can sometimes make financial matters harder instead of easier. We can help you think through the practical advantages and problems before making that choice.
Should I name my oldest child?
Age alone should not decide who serves as your agent.
Choose the person you trust to make responsible decisions. One child may be better with finances, while another may be better suited for a different role in your estate plan.
Can my agent change my will?
A financial agent does not simply step into your shoes for every personal legal decision. Your Durable Power of Attorney should clearly define the authority you are granting, and some decisions remain personal to you.
Do I need a Durable Power of Attorney if I do not have many assets?
It can still be valuable.
Even if you do not consider yourself wealthy, someone may need to pay bills, manage accounts, handle taxes, deal with insurance, or address other financial matters if you become unable to do so.
Is a Durable Power of Attorney only for older people?
No.
Adults of many ages can benefit from having one. Younger adults and parents can become unable to manage their affairs because of an accident or unexpected illness just as older adults can.
Does my agent have to be a lawyer?
No.
The person you name is often a spouse, family member, or another trusted person. The term sometimes used for an agent, “attorney-in-fact,” does not mean the person must be an attorney.
Can I name a backup agent?
Yes, and having an alternate can be an important part of the plan. If your first choice cannot or will not serve, your alternate may be able to step into the role.
What happens to the Durable Power of Attorney when I die?
The authority under a Durable Power of Attorney ends at death. At that point, your will, trust, beneficiary designations, and other parts of your estate plan determine what happens next.
Can I create a Durable Power of Attorney online?
Forms are available online, but the document is important enough that you should understand exactly what you are signing and what authority you are granting.
A generic form cannot ask questions about your family, finances, concerns, or the person you are considering as your agent.
Working with an estate planning attorney can help make sure your document fits your situation and works with the rest of your estate plan.
A Small Step Today Can Make Things Much Easier Later
Nobody creates a Durable Power of Attorney because they expect to use it next week. You create one because you want your family to know what to do if the unexpected happens.
Instead of leaving your spouse, children, or other loved ones trying to figure out who can legally act, you can make that decision yourself.
- You choose the person.
- You decide what authority to give them.
- You create a plan while you are able to make those choices clearly.
- That can provide valuable peace of mind for both you and your family.
Talk With a Wauwatosa Estate Planning Attorney
If you have been putting off a Durable Power of Attorney because you are unsure where to begin, we can help make the process easier.
At Margerie Law, we help individuals and families in Wauwatosa, Elm Grove, Brookfield, Milwaukee, and surrounding communities create clear estate plans for the situations that matter most. We will talk through your concerns, explain your choices in plain language, and help you choose a plan that makes sense for your life.
You do not need to figure everything out before you call us. That is what we are here to help with.
If you are ready to create or update a Durable Power of Attorney, contact our team today. We can help you put the right people and documents in place so your family has clear direction if they ever need it.
About Us
Hi, I'm Paul and I believe I'm the best estate planning attorney in Brookfield, WI. I help my clients understand their options and put a plan in place to protect their most valuable assets for future generations. Working closely with top financial professionals I help families of all sizes and types plan for tomorrow in order to enjoy today. I proudly serve clients in Milwaukee, Brookfield, Elm Grove, Wauwatosa, and throughout SE Wisconsin. If you need Estate Planning help, a Will, a Trust setup, or are just looking for some life planning advice, give me a call today.
