Powers of Attorney
WHAT IS A “DURABLE POWER OF ATTORNEY”?
A “durable power of attorney” is part of an overall estate plan, along with a Will or Trust and Advance Directive for Health Care. The durable power of attorney helps to plan for incapacity during your lifetime.
While nobody plans to become incapacitated most of us know someone who has lost, or is losing, their mental acuity do to age, illness or an accident.
Often prospective clients will tell me that they have already planned for incapacity. By this they mean that they have signed an Advance Directive for Health Care so that somebody can discontinue life support. But there’s more to planning for incapacity than that.
Unfortunately, people rarely think about who will make their economic and legal decisions for them if they become incapacitated, or simply assume that their spouse can take care of all matters. That is often incorrect. You should have a “durable power of attorney” and it must be signed while you are still competent.
Many people assume that their spouse will be able to sign legal and financial for them if they are unable to sign for themselves. This is not correct.
A “durable power of attorney” allows you to appoint an agent to handle your financial and legal affairs for you if you become incapacitated. It may be effective immediately, or become effective only when you lose mental capacity.
The power of attorney may allow your agent to handle your government benefits, banking, tax, litigation, insurance, investment and real estate matters. It can authorize your agent to manage your retirement plans and undertake estate planning. The agent can hire professional advisers such as lawyers and accountants, or household workers, such as caregivers. By having a “durable power of attorney” now you may prevent the need for a much more expensive court-supervised “conservatorship” in the future.
Of course, you should also have an “Advance Directive for Health Care”. The “Advance Directive for Health Care” enables the person you select to make your health care decisions for you, including the decision to terminate life support, if you are unable to make your health care decisions for yourself.