A young woman in her 40s called me one day completely distraught. She was married with two adorable little girls, but her husband was hit by a drunk driver and had been in a coma for quite some time. Her income alone was unable to support her family, and the bills were starting to pile up. She wanted to sell her house so she could use and salvage the equity in their home that they’d worked so hard to build. The problem was that the house was owned by her AND her husband. While this may not seem to be too problematic, in actuality, it was. Without having a durable power of attorney for finance, she was unable to sign on her husband’s behalf even though he couldn’t do so himself.

Estate Planning is not just about planning what happens when you die. It’s also about planning for the possibility of you becoming incapacitated (unable to make your own decisions). No one expects tragedies but unfortunately, they are a fact of life. It’s cruel but inevitable. Did you know that according to the Highway Patrol, in 2010, there were 54,875 people injured in car crashes just in the state of Missouri? And I see more and more people looking at their phones while they drive every day.

Back in September, I talked about the Health Care Power of Attorney, which is needed to plan for your incapacity. Well, the Power of Attorney for Finance is a separate document that also comes in very handy. Basically, this gives the person you designate the ability to handle your financial affairs in the event you can’t. It includes everything from paying your bills to selling your property to handling some overlooked last minute estate planning.

This Power of Attorney for Finance can either be durable or springing. If it’s durable, that provides quite a bit more flexibility and allows the person’s agent to sign on his behalf in the event he is unavailable. A Springing Power of Attorney, on the other hand, only becomes enacted upon the actual incapacity of the person. My client’s husband did not have any type of power of attorney in place, and because of it, he exposed his wife and two little girls to the possibility of losing everything they’d worked so hard to attain.

So at what point should someone do this type of planning? Planning for one’s incapacity needs to start the second someone becomes a legal adult. Once that happens, your parents don’t have the authority to make those decisions for you anymore, and signing the marriage certificate does not provide your spouse with this authority either.

Fortunately for my client, she had some close relatives that ended up being able to help her through the difficult times, and she was able to save the house. She was lucky she had a reliable support system, but a simple power of attorney for finance would have prevented the situation from escalating to the point it did.