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A power of attorney can be an important part of an estate plan

Estate planning in Florida involves more than just figuring out how to distribute one's person's assets at death. Discussing the estate with potential heirs, creating a will and setting up appropriate trusts are all important aspects of the estate planning process. However, so too is planning for the possibility of being incapacitated and unable to manage one's assets and financial affairs. This is where a power of attorney (POA) can become an important component of an estate plan.

In the context of dealing with financial accounts and assets, a POA is an instrument that allows one person, known as the attorney in fact, to make legally binding decisions on behalf of the account holder, who is referred to as the principal. The Financial Industry Regulatory Authority (FINRA) suggests that people consider a number of factors before choosing a person who will have this kind of authority over their investment accounts.

FINRA warns that a person should never let someone else pressure them into signing a POA. A POA is a powerful legal instrument and if someone is pressuring another person to grant them that kind of power, it could be because they plan to use the POA for their own benefit. When selecting an attorney in fact, the account holder should have complete trust in that person, and the attorney in fact should fully understand the principal's investment goals. Furthermore, it is important for the account holder to know how they can go about revoking or changing their POA for any reason.

Another tip from FINRA is that the principal should research the applicable legal issues before executing a POA. An experienced estate administration attorney can review the principal's wishes and help them to craft a legally enforceable POA.

A POA can be an important piece of a thorough estate plan. As a person ages, or if they become unexpectedly incapacitated, they may be unable to keep up with managing their financial accounts. People in Polk County who want to set up a POA may want to first speak with an estate planning attorney to make sure that they cover all the important bases before giving someone else power over their financial accounts.

Source: The Motley Fool, "Power of Attorney and Your Investments: 10 Tips," Accessed on April 4, 2016

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