A financial power of attorney can be a valuable tool to help protect your finances and empower you to make important financial decisions for a loved one who can’t make decisions for themselves. It’s often used as part of an estate plan, but might also be needed to sell a house, pay bills or even make investment decisions. Here is how it works in the state of Wisconsin. In order to make sure you do this correctly, you may want to talk to a lawyer or financial advisor.
Understanding a Financial Power of Attorney
A financial power of attorney is a legal document that empowers an individual (known as the principal) to designate another person (referred to as the agent) to manage their financial affairs for a specific period of time.
One common use of a financial power of attorney is to appoint an agent when the principal is away from home for long periods of time. So, if you travel frequently for work, you could appoint a trusted individual as your agent to handle financial transactions like paying bills or managing investments.
While a financial power of attorney is a common estate planning tool used across the country, laws governing this legal document can be specific to the state. In the case of Wisconsin, statute 244 outlines how a power of attorney can be created, used and terminated.
When You Might Need a Power of Attorney
You might need a financial power of attorney for many reasons, including physical or mental incapacity, extended travel or managing complex financial transactions.
One common example, if a principal is diagnosed with a progressive illness like Alzheimer’s, a financial power of attorney can ensure that their finances are properly managed as their condition worsens.
The legal requirements to establish a financial power of attorney vary by jurisdiction, or state. In Wisconsin, for example, the document must be signed by the principal and two adult witnesses, and it must be notarized.
Wisconsin law also identifies unique forms for granting financial powers to an agent and even allows for the designation of a “monitor.” This individual can request a copy of the power of attorney document and ask the agent to provide a record of all actions taken on behalf of the principal.
When choosing an agent, it’s important to select a trustworthy individual who understands your financial goals and is willing to act in your best interest. Making this decision carefully can help you ensure that your financial affairs are handled responsibly and effectively.
Unique Power of Attorney Rules in Wisconsin
The scope of the authority that a power of attorney provides is determined by the principal. It can range from managing bank accounts to buying or selling property and making decisions about investments.
In Wisconsin, a power of attorney is valid when the principal signs in the presence of a notary public. This rule, stipulated under Wisconsin Statutes Section 244.05, ensures a level of impartiality in the process of establishing a POA and aims to minimize potential coercion or undue influence.
Comparatively, a power of attorney in some states only requires the principal’s signature. This can complicate the process for non-residents who have assets in Wisconsin or for residents who move out of state and wish to establish a power of attorney elsewhere. It’s therefore important to seek legal advice to ensure compliance with Wisconsin’s power of attorney laws.
How to Obtain a Financial Power of Attorney in Wisconsin
You may need to get a power of attorney when the principal becomes incapacitated due to illness or injury. The process to receive your power of attorney can vary by state. In Wisconsin, it can be broken down into these three steps:
- The principal must complete a Power of Attorney for Finances and Property form, available on the Wisconsin Department of Health Services website.
- The form must be signed by the principal and two adult witnesses. Wisconsin does not require the document to be notarized unless it is used to transfer real estate.
- The completed and signed document should be kept in a safe place and made available to the attorney-in-fact when needed.
Choosing your attorney-in-fact is an important decision. Ensure that the person chosen is trustworthy and capable of making sound financial decisions. It’s also a good idea to have a conversation about responsibilities and expectations. Consulting with a legal professional is recommended to ensure that all requirements are met and the document is legally sound.
Bottom Line
A financial power of attorney is a legal document that can empower you to make financial decisions for others when they become incapacitated. For those residing in Wisconsin, having a financial power of attorney is particularly beneficial as it can prevent you from undergoing the often costly and lengthy court procedure of appointing a conservator in the event of incapacity.
Tips for Financial Planning
- A financial advisor can help you create a comprehensive financial plan to manage your interests. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- One of the most important things to do to reach any financial goal is to save enough money to help you get there. Consider using a savings calculator to help determine how much your future savings might grow.
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