So you need some help managing your financial affairs. Let’s look at your options.
A Power of Attorney is a document you sign that gives another person authority to handle all or some of your financial transactions. In the Power of Attorney, you are the principal and the person you appoint is the agent. The document describes the types of transactions the agent is authorized to handle. The Power of Attorney does not remove your right to make your own decisions, but it does give your Agent the power to make decisions, also.
A Supported Decision-Making Agreement is an agreement that you sign when you have a disability. For this document, “disability” means you have a physical or mental impairment that substantially limits one or more major life activities. The Agreement appoints a “Supporter” who assists you by obtaining information, helping you understand your options, and then communicating your decisions. Unlike a POA agent, the Supporter does not actually make the decisions. You do not relinquish your power to make your own decisions under this Agreement.
A Trust is an agreement between you, as Settlor, and your agent, as Trustee, to manage certain named assets for the benefit of named individuals or charities (the beneficiaries). The Trustee has the power to make decisions. While Trusts vary, most Trusts will remove your power to make decisions about the assets unless you are also serving as Trustee.
A Guardianship is a court-created relationship. A Guardianship can only be created if you are partially or totally incapacitated. The Court appoints a Guardian to make certain decisions for you, and removes your right to make those decisions. A Guardian who handles your financial affairs is called a Guardian of the Estate.
If you wish to enter into a Power of Attorney or a Supported Decision- Making Agreement, or form a Trust, then you must have the mental capacity to understand what you are doing, why you are doing it, and the effect of the document. Once you lose that mental capacity, you can no longer execute those documents.
The Guardianship is the most extreme and detrimental of the choices. You should try to avoid a Guardianship at all costs.
Hammerle Finley Law Firm. Give us a call. We can help.