Why a Financial Power of Attorney Is More Important Than a Will
- Ashley Sharek
- 2 days ago
- 6 min read
When most people think about estate planning, they immediately think of a last will and testament. While a will is important, it only comes into effect after you pass away. It does not protect you or your assets during your lifetime.
This is a critical misunderstanding that can leave families vulnerable during times of illness, injury, or mental incapacity. If you become unable to manage your financial affairs, who will step in to help? Without the proper legal documents in place, your loved ones may have no authority to act on your behalf.
That is why having a financial power of attorney is one of the most important and often overlooked parts of a comprehensive estate plan.
In this article, we will explore what a financial power of attorney is, why it matters, and how it works in Pennsylvania. We will also discuss what makes a strong power of attorney and how to make sure your plan covers all the critical details.
A Will Only Works After You Die
A will is a legal document that outlines how you want your assets to be distributed after your death. It also allows you to name guardians for your minor children and nominate an executor to handle your estate.
However, a will does nothing to protect you while you are alive. If you become incapacitated due to an accident, illness, or cognitive decline, your will cannot help your family manage your finances, pay your bills, or access your accounts.
This is where a financial power of attorney becomes essential.
What Is a Financial Power of Attorney?
A financial power of attorney is a legal document that allows you to appoint a trusted person, known as your agent, to manage your financial affairs if you become unable to do so yourself.
This document grants the agent legal authority to take actions on your behalf, such as:
Paying your bills and managing bank accounts
Filing and signing tax returns
Handling retirement distributions and insurance claims
Making investment and real estate decisions
Running a business or managing rental properties
Accessing safe deposit boxes and financial records
A well-drafted power of attorney ensures that your financial life continues smoothly, even if you are temporarily or permanently unable to make decisions.
Why It Matters in Pennsylvania
Pennsylvania has specific laws and requirements regarding powers of attorney. If you use a generic or outdated form, it may not be accepted by banks, government agencies, or other financial institutions.
Worse, if you do not have a financial power of attorney at all, your loved ones may need to go to court to obtain guardianship over your finances.
This process, known as guardianship or conservatorship, is often expensive, time-consuming, and emotionally draining. It involves court filings, medical evaluations, and regular oversight by the legal system.
During this process, your family may be unable to take care of your basic financial needs, such as paying your mortgage or accessing your accounts.
Having a valid and robust financial power of attorney can help your family avoid court altogether and ensure that your affairs are managed quickly and smoothly.
Real-Life Scenarios That Show the Importance of a Power of Attorney
A Sudden Illness or Accident
Imagine you are in a car accident and become unconscious for several weeks. During that time, bills need to be paid, insurance paperwork must be filed, and your mortgage still needs to be covered. Without a power of attorney, your spouse or children may not be able to access your bank accounts or act on your behalf.
Dementia or Cognitive Decline
Many families face the difficult journey of watching a loved one experience memory loss, dementia, or Alzheimer’s disease. As the condition progresses, the individual may lose the ability to manage their finances or understand complex decisions. If a power of attorney is not in place before this decline, it may be too late to put one in place legally.
Military Deployment or Travel
If you are serving in the military or traveling for an extended period, you may need someone to manage your financial matters in your absence. A power of attorney ensures that the person you trust has the authority to handle things back home while you are away.
Business Owners
If you own a business and become temporarily incapacitated, your absence could put the business at risk. A power of attorney allows a trusted partner or associate to continue operating the business and making key financial decisions while you recover.
What Makes a Strong Financial Power of Attorney?
Not all financial powers of attorney are the same. Some are limited in scope, poorly written, or outdated. In Pennsylvania, a comprehensive power of attorney should include the following key features:
Clearly Named Agent and Backup Agents
You should choose someone you trust completely to serve as your primary agent. You should also name one or two backups in case your first choice is unavailable or unable to serve.
Broad and Specific Powers
The document should list the types of actions your agent is allowed to take. This includes managing property, filing taxes, handling retirement accounts, and more. It should also be tailored to your specific needs and financial situation.
Immediate or Springing Authority
You can choose whether the power of attorney becomes effective immediately or only if you become incapacitated. In Pennsylvania, many people choose immediate authority for convenience, but this decision should be discussed with your estate planning attorney.
Durable Language
A durable power of attorney means it stays in effect even if you become mentally incapacitated. Without this language, the document may be invalid when you need it most.
Compliance with Pennsylvania Law
The document should be signed, dated, and notarized according to state law. It should also include special notice and acknowledgment sections as required under Pennsylvania statutes.
Common Myths About Financial Powers of Attorney
Myth 1: I Am Married, So My Spouse Can Handle Everything
Even if you are married, your spouse may not have legal access to your individual bank accounts, retirement accounts, or property titled in your name alone. Financial institutions may deny access without a valid power of attorney.
Myth 2: I Can Just Use an Online Form
Generic online documents often do not meet Pennsylvania legal requirements and may not be accepted by financial institutions. Estate planning should never be one-size-fits-all.
Myth 3: I Am Too Young to Need One
Unexpected accidents and illnesses can happen at any age. Everyone over the age of eighteen should have a financial power of attorney in place, especially if they have a job, own assets, or live independently.
The Consequences of Not Having a Power of Attorney
Failing to have a valid financial power of attorney can result in serious problems for you and your loved ones. These can include:
Court intervention and guardianship proceedings
Delayed access to funds during emergencies
Missed bill payments and damaged credit
Inability to make time-sensitive financial decisions
Increased legal fees and family stress
Putting a power of attorney in place is not just a legal formality. It is a thoughtful decision that protects your independence and helps your family support you when you need it most.
How Entrusted Legacy Law Can Help
At Entrusted Legacy Law, we understand that estate planning is not just about legal documents. It is about protecting your values, securing your family’s future, and ensuring peace of mind during uncertain times.
Our team takes a relationship-based approach. We get to know you, your goals, and your unique circumstances. We then craft a custom plan that includes all the right documents, including a strong financial power of attorney that meets Pennsylvania’s legal standards.
We also work on a flat fee basis, so you will never be surprised by a bill. Whether you are planning ahead or navigating a crisis, we are here to guide you every step of the way.
Take the First Step Today
Estate planning is not only about what happens after death. It is about making sure you are protected while you are alive.
A financial power of attorney is one of the most important tools in your estate planning toolbox. It gives your loved ones the authority to care for you and your finances when you cannot do it yourself.
Do not wait for a crisis. Start the conversation today.
