Why You Need a Durable Power of Attorney Now!
Planning for unfortunate events such as for example serious disease or injury is rarely on anyone's list of favorite pastimes. Sometimes, though, enduring the small discomfort which could accompany preparing for the unexpected will avoid untold anguish on the part of your family and friends. This is certainly the case with the Durable Power of Attorney, an often simple document that becomes so essential if sickness or injury renders you struggling to take care of your own affairs.
Power of Attorney Defined
AN ELECTRICAL of Attorney is really a document where you (as the "Principal") allow another person (the "Agent" or "Attorney-in-fact") to do something legal ly in your stead. THE ENERGY of Attorney could be limited by very specific actions that the Agent is authorized to take on your behalf. On the other hand it may supply the Agent very broad powers. In either event, the Agent you appoint in the Power of Attorney ought to be someone that you trust without reservation. That could be a family member, an advisor, a trustworthy friend or a bank or similar institution.
The "Durable" Power of Attorney
The significance of experiencing a "Durable" Power of Attorney is best understood once you learn so what can happen with the the usual garden variety of Power of Attorney.
If you sign a Power of Attorney that's not "durable," the document remains effective only when you are alive and competent to take care of your own affairs. In the event that you become incompetent or die, the Power of Attorney is automatically revoked by law and your Agent is not any longer in a position to act on your behalf. This prevents a Power of Attorney from becoming irrevocable inadvertently, and, until recent years, it was the only way a Power of Attorney could possibly be prepared.
The non-durable Power of Attorney has limited usefulness for family and estate planning purposes, though, because the Power of Attorney is frequently most needed once you have become incapacitated! Then you really need another person that is able to make legal decisions or take other actions in your stead.
All fifty states now let the usage of a "durable" Power of Attorney that is not revoked simply because the main becomes incapacitated or mentally incompetent. This makes the Durable Power of Attorney a far more reliable document, particularly for family and estate planning purposes, because you may now authorize your Agent to do something on your behalf even with illness, injury or other cause has rendered you struggling to manage your personal affairs. Even with a Durable Power of Attorney, however, the Principal's death causes an instantaneous revocation of the document and termination of the powers which are directed at the Agent.
A Matter of Convenience
The Durable Power of Attorney is often used as a matter of convenience.
Suppose, for example, you have your home listed on the market. You have also planned a long awaited trip to visit Aunt Trixie in Deadwood, South Dakota, and you are concerned that an interested buyer may come along while you are on the road. A Durable Power of Attorney would be handy here to appoint someone you trust to do something in your absence to negotiate the sale and sign any documents which are needed to make the offer binding.
The Durable Power of Attorney could be prepared so that it is effective only until the date you plan to return from your trip, and it might describe specific terms that your Agent must include in the sale, such as the minimum sale price that's acceptable to you.
A Matter of Protecting FAMILY MEMBERS
What goes on if, from illness, injury or another cause, you feel physically or mentally incapacitated to the point that you are no longer able to handle your own legal affairs?
Let's suppose again that while you are incapacitated it becomes necessary to mortgage your house to pay your medical bills. Who'll sign the mortgage? Even though your property is jointly owned with your spouse, he cannot get yourself a mortgage without your signature.
In those circumstances it might be necessary to request the local probate court to appoint a guardian for you personally that has the power to take care of your legal affairs. In lots of states, this kind of guardian is known as a "conservator". Included in the conservator's powers might be the power to borrow funds and sign a mortgage on your behalf to be able to obtain the funds had a need to pay the medical bills.
However, you could have heard that it is beneficial to avoid probate whenever you can, particularly if you will find a good alternative available. The delay and expense associated with probate proceedings and the fact that they're conducted in the probate court, a public forum, make that good advice generally in most circumstances. And there is a better alternative than probate, but it requires you to act prior to the incapacity arises - you have to sign a Durable Power of Attorney.
When found in this estate planning context, the Durable Power of Attorney is generally worded very broadly to provide your Agent the energy to step into your legal shoes in almost any circumstance. In effect, you tell your Agent "That can be done anything I can do."
Now, assuming you have prepared the Durable Power of Attorney and then become incapacitated, nobody has to proceed through a probate proceeding to appoint a guardian or conservator to do something for you personally - you have already given your Agent the energy to do so. As you can plainly see, the Durable Power of Attorney can save time and expense in critical situations and avoid having your individual affairs end up being the subject of a public proceeding.
Appointing a Successor Agent
It is often smart to appoint a number of successor Agents. The Agent you appoint in your Durable Power of Attorney may die or for a few other reason become unable or unwilling to act as your Agent. If so, you may be left without someone to act for you when you most need that assistance.
Appointing successors to your first choice of Agent helps insure that someone is always available to handle your affairs. Of course, each successor that you appoint should be someone that has your complete trust.
Revoking a Power of Attorney
As long as you are competent, you have the power to revoke your Durable Power of Attorney. To do so, send written notice to your Agent notifying him or her that the document has been revoked. After the Agent has notice of your revocation, the Agent may take no further action beneath the Durable Power of Attorney. However, your revocation will not undo any permissible actions that the Agent has had ahead of being notified that the energy of Attorney has been terminated.
You need to also notify third parties with whom your Agent has been dealing that the Durable Power of Attorney has been revoked. For instance, if the Agent has been coping with a stockbroker, you must notify the stockbroker as quickly as possible. Do this in writing, as well, and do it immediately. Third parties who do not receive notice of the revocation are entitled to, and probably will, continue to rely on the Durable Power of Attorney.
Making the Durable Power of Attorney Effective upon Incapacity.
It is possible to have a Durable Power of Attorney that only becomes effective if and when you become incapacitated. This document is referred as a "springing" Durable Power of Attorney because it "springs to life" on the occurrence of another event - your incapacity. The document should include a detailed definition of "disability" to create clear the circumstances where your Agent may act in your stead.
Realizing that your Agent is unable to exercise his / her powers until you are in fact unable to achieve this yourself may make using the Durable Power of Attorney more comfortable for you. Unfortunately, despite having a good definition of incapacity in the springing Durable Power of Attorney, your Agent may find that third parties are simply just not willing to make the judgment that you are indeed disabled. If they're wrong, they might be held liable to you for just about any damages that you sustain as a result of the error in judgment. You might therefore find the springing document cannot be relied upon in all circumstances.
Don't Procrastinate!
Estate planning is easy to put off. But don't! Advance planning, such as for example executing a Durable Power of Attorney, could make a horrible circumstance for you and your family just a bit more bearable.