Which legal instrument is appropriate for managing a client's financial affairs if they become incapacitated?

The most appropriate legal instrument for managing a client's financial affairs in the event of their incapacitation is a power of attorney. This document grants a designated individual, known as the agent or attorney-in-fact, the authority to make financial decisions and manage the person's financial affairs when they are unable to do so themselves.

A power of attorney can be specifically tailored to meet the needs of the client, allowing them to decide the extent of authority they wish to grant. This includes handling banking transactions, paying bills, and managing investments. If the client becomes mentally or physically incapacitated, the power of attorney remains effective, enabling the appointed person to act on their behalf without the need for court intervention.

In contrast, a will is a document that dictates how a person’s assets are to be distributed after their death and does not take effect until that time. A trust can also be involved in managing assets but generally requires the grantor to be alive and competent to administer it. A healthcare directive, while important for making medical decisions, does not cover financial affairs and is therefore not suitable for managing financial matters during incapacitation.