If You Own Rental Properties, A Financial Power Of Attorney Is Critical
Virtually everyone can benefit from listing financial and medical powers of attorney as part of their estate planning process, but the former is especially important for people who have certain business interests. If you're someone who owns and operates several rental properties, they likely present a significant source of revenue for your family. In the event of an injury or illness that prevents you from fulfilling your everyday duties with these properties, you need to have a financial power of attorney step in to manage them. By working with your estate planning attorney to list a trusted individual as your financial power of attorney, he or she will be able to handle these duties.
While it's possible that your rental tenants pay rent through a direct withdrawal system, it's also possible that you collect physical checks from them at the start of each month. If you're unable to do so, not every tenant will be vigilant enough to inquire about how to pay you — and this can mean that your family goes without the funds that it needs. A financial power of attorney will serve as your representative and can collect and deposit the checks. Of course, you'll need to provide this trusted person with details about your tenants and the amount of rent that they pay.
Authorize Building Repairs
Owning rental properties isn't just about collecting rent. You also have an obligation to keep the properties to a certain standard, and this often costs money. Whether you need a plumber to fix a clogged drain or a general contractor to put new flooring down between tenants, someone needs to authorize these expenses. Your tenants may be sympathetic to your situation, but will grow impatient if they cannot get the help that they need. Your financial power of attorney will have the capacity to authorize any necessary work while you cannot.
Sell Buildings Or Units
It's possible, given your medical issues, that your family may need to raise money for your care. If you own multiple rental properties, they provide a steady source of income — but a larger sum of money may be more valuable at this time. Your financial power of attorney can discuss selling one or more units that you might own in a condo building or perhaps selling houses or other rental properties entirely to raise the necessary funds. Going over all of these details with your power of attorney and your estate planning attorney can ensure that you leave your rental property business in good hands.
Contact a service, like Abom & Kutulakis LLP, for more help.