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Senior Vice President Legacy Bank
Mark Dunsmoor

Today’s article is a part of the Forward Thinking Education Series presented by Legacy Bank, the Latino Chamber of Commerce and the Pueblo Chieftain. Webinars further discussing this and other financial topics can be found on the Latino Chamber of Commerce Facebook page at: https://m.facebook.com/PuebloLCC/

In a previous article we discussed the importance of people having a will in place when they pass away. Wills not only dictate the terms of a deceased person’s estate but stipulate who may have access to their financial assets including bank accounts.

But what about preparing for other situations where you may need someone else to handle your financial affairs? What if you become physically or mentally incapacitated following a stroke or an accident and can’t make financial decisions or initiate financial transactions? This might also occur if your physical or mental health deteriorates over time. Perhaps you’re fine physically and mentally but you travel extensively or live in more than one location during the year but have on-going financial assets and responsibilities in multiple locations.

According to Mark Dunsmoor, Senior Vice President at Legacy Bank, these circumstances may create a need for a third party to manage your personal or business financial affairs. “There needs to be someone available to keep an individual’s or a family’s financial house in order such as paying everyday bills, handling property and income taxes, managing investments and retirement funds, paying health, property and auto insurance premiums or making deposits into and withdrawals from bank account’s” Dunsmoor notes. “That individual needs access to bank accounts, financial assets and records, preferably through an enduring financial power of attorney.” In Colorado a financial power of attorney is also known as a general power of attorney.

To give another individual a durable financial power of attorney, you must sign a legal document authorizing them to handle your financial affairs if you are unable or unavailable to do so. As the person granting this power you are identified as the principal. The person receiving your financial power of attorney is known as an agent. The agreement may be effective immediately or at a future date when the you are deemed unavailable or incapable of making financial decisions. The agent’s authority to act on your behalf terminates when you die. Usually people give their agent broad power to handle all of their finances but that authority can be limited to specific financial actions if desired.

In many cases it makes sense for someone to name their spouse as their agent. Often a husband and wife will name each other. Depending on circumstances, another trusted family member or friend could be selected. Your durable financial power of attorney also ends if you revoke it as long as you are mentally competent to do so.

To create a legally valid durable financial power of attorney, you need to properly complete and sign a fill-in-the-blank form that's a few pages long. Some states have their own forms. In Colorado you can download forms from a variety of websites. Some banks and brokerage companies have their own specialty forms. If you want your agent to have an easier time with these institutions, you may need to prepare two or more documents provided by the institutions with which you do business.

Some states require the document to be notarized and witnessed. Colorado law requires neither but it still may be best to do so. While it is not mandatory that you retain an attorney to help prepare and review your durable financial power of attorney, it may be best that you consider it to obtain specific answers to personalized questions.

Mark Dunsmoor is a Senior Vice President of Legacy Bank with 41 years of banking expertise. Dunsmoor has been recognized as the Greater Pueblo Chamber of Commerce Charles W. Crews Business Leader of the Year and volunteers in many capacities including on the local hospital board.

Author: Mark Dunsmoor, Senior Vice President Legacy Bank

 

Article Published on The Pueblo Chieftain here.