Accredited Wealth Management Advisor Practice Exam

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What is a “durable power of attorney”?

A legal document that enables an individual to create a trust

A legal document that allows someone to act on behalf of another in financial matters if they become incapacitated

A durable power of attorney is a legal document specifically designed to grant someone the authority to act on behalf of another person in financial matters, particularly when that individual becomes incapacitated. This allows designated individuals to manage financial assets, pay bills, and handle other monetary affairs, ensuring that the individual's financial interests are protected even when they cannot make decisions themselves due to illness, injury, or other reasons.

The durability aspect of this document means that it remains effective even if the person who created it loses mental capacity. This trait distinguishes it from a regular power of attorney, which may become invalid under such circumstances. By enabling a trusted agent to manage financial matters, a durable power of attorney offers peace of mind and continuity in the management of assets, thereby helping to prevent financial exploitation and ensuring that the incapacitated person's wishes are respected.

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An agreement to split assets after death

A document that outlines health care decisions

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