Does the Average Person Need a Financial POA?

What is a POA?  You may think that a power of attorney (POA) is only for the wealthy, but a POA can be of great benefit to most people.  There are two main types of POAs: financial and healthcare.  I will be discussing financial POAs in this blog post.

What is a POA?

A financial durable POA can be used to determine who will take care of your assets and make financial decisions for you should you become incapacitated.  If you become incapacitated and you do not have a financial durable POA, the Court will decide who handles your finances by appointing a conservator of your estate.  Many people assume that their spouse will automatically have the authority to make financial decisions for them should they become incapacitated, but that is not always the case.  If an asset is jointly owned by a married couple, there should be no problem; but, in the case of separately owned assets/accounts, the spouse doesn’t automatically have the authority to act on behalf of the incapacitated individual.

Who Will the Court Appoint as Conservator?

When the Court determines who to appoint as conservator of an incapacitated individual in Arizona, the priority of appointment is as follows (A.R.S. §14-5410):

1. A fiduciary appointed by a court of another jurisdiction in which the protected person (“PP”) resides.
2. An individual or corporation nominated by the PP if the PP is at least 14 years of age and has sufficient mental capacity.
3. A person nominated to serve as conservator in a durable POA.
4. The spouse of a PP.
5. An adult child of a PP.
6. A parent of a PP, or a person nominated by the Will of a deceased parent.
7. Any relative of a PP with whom the PP has resided for more than six months prior to the filing of the petition.
8. The nominee of a person who is caring for or paying benefits to the PP.
9. The Department of Veterans’ Services, if the PP is a veteran, the spouse of a veteran, or a minor child of a veteran.
10. A licensed fiduciary, other than a public fiduciary.
11. A public fiduciary.

Protected Person & Incapacitated Person Defined

A PP is defined as a minor or any other person for whom a conservator has been appointed, or any other protective order has been made.  According to the Arizona Revised Statutes, an “incapacitated person” is someone who is impaired by reason of mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication, or other cause, except minority, to the extent that he lacks sufficient understanding or capacity to make or communicate responsible decisions for himself.

What about my Spouse and Children?

As you can see, when the Court is determining who to appoint as conservator, the spouse and children of the PP are choices four and five, respectively.  If you become incapacitated and you have a financial durable POA, whoever you appoint as Agent will have the authority to handle your finances, without court intervention.  You may have also noticed that you can nominate a conservator for your children in your Will and that person would be choice number six if the Court has to get involved.  You can also create a testamentary trust for any minor beneficiaries via your will, which generally would not require court involvement.

Get a POA so you can decide who will be conservator of your estate.

A financial durable POA doesn’t prevent someone from petitioning the Court to become the conservator of your estate.  You can nominate someone in your POA to act as conservator should this sort of situation arise.  As you can see from the above list outlining the priority of appointment, the person nominated in your POA will be considered even before your spouse and children.  Of course, most people nominate either their spouse or one of their children to act as agent and/or conservator in their POAs, but they are free to nominate someone else if they so choose.

Don’t wait until it’s too late!

One extremely important thing to remember is that time is of the essence.  Once you lack capacity, you can no longer enter into a binding agreement; which means it would be too late for you to execute a POA.

Arizona Probate, LLC offers POAs for $250; see our Services page for more information.  We also offer Wills for $250.  Julie Ruetz is an Arizona Licensed Fiduciary, so she can be listed in your estate planning documents as successor trustee, personal representative, conservator, guardian, or agent under your POA.  Call 520-252-6726 for further information.

The information on this website is for informational purposes only and should not be construed as legal advice.