Planning for unfortunate events such as serious disease or injury is rarely on anyone's list of favorite pastimes. Sometimes, though, enduring the tiny discomfort which could accompany finding your way through the unexpected will avoid untold anguish for your family and friends. This is really 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 in which you (as the "Principal") allow someone else (the "Agent" or "Attorney-in-fact") to act legally in your stead. The Power of Attorney could be limited to very specific actions that the Agent is authorized to take on your behalf. Alternatively it may give the Agent very broad powers. In either event, the Agent you appoint in the energy of Attorney ought to be someone that you trust without reservation. That could be a family member, an advisor, a trustworthy friend or perhaps a bank or similar institution.
The "Durable" Power of Attorney
The significance of experiencing a "Durable" Power of Attorney is most beneficial understood once you learn so what can happen with the plain old garden selection of Power of Attorney.
If you sign a Power of Attorney that is not "durable," the document remains effective only when you are alive and competent to handle your own affairs. In the event that you become incompetent or die, the Power of Attorney is automatically revoked for legal reasons and your Agent is no longer in a position to act on your behalf. This prevents a Power of Attorney from becoming irrevocable inadvertently, and, until recent times, it was the only method an electrical of Attorney could be prepared.
The non-durable Power of Attorney has limited usefulness for family and estate planning purposes, though, as the Power of Attorney is often most needed when you have become incapacitated! That is when you really need someone else that is able to make legal decisions or take other actions in your stead.
All fifty states now permit the use of a "durable" Power of Attorney that's not revoked simply because the Principal becomes incapacitated or mentally incompetent. This makes the Durable Power of Attorney an even more reliable document, particularly for family and estate planning purposes, because you may now authorize your Agent to act on your behalf even after 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 immediate 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 house listed for sale. You also have planned a long awaited visit to visit Aunt Trixie in Deadwood, South Dakota, and you also are concerned an interested buyer will come along when 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 deal binding.
The Durable Power of Attorney could possibly be prepared in order that it is effective only until the date you plan to return from your trip, and it might describe specific terms your Agent must use in the sale, such as the minimum sale price that is acceptable to you.
A Matter of Protecting Loved Ones
What happens if, from illness, injury or another cause, you become physically or mentally incapacitated to the stage that you are no longer able to handle your own legal affairs?
Let's suppose again that while you are incapacitated it is needed to mortgage your house to cover your medical bills. Who'll sign the mortgage? Even if your home is jointly owned with your spouse, he cannot obtain a mortgage without your signature.
In those circumstances it might be necessary to request the neighborhood probate court to appoint a guardian for you that has the energy to handle your legal affairs. In lots of states, this type of guardian is known as a "conservator". Contained in the conservator's powers may be the power to borrow money and sign a mortgage on your behalf making it possible to obtain the funds needed to pay the medical bills.
However, you could have heard that it's beneficial to avoid probate whenever you can, particularly if there exists a good alternative available. https://legal.com and expense associated with probate proceedings and the truth that they're conducted in the probate court, a public forum, make that advice in most circumstances. And there's a better alternative than probate, nonetheless it requires one to act prior to the incapacity arises - it is advisable 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 power to step into your legal shoes in almost any circumstance. In place, you tell your Agent "That can be done anything I can do."
Now, assuming you have prepared the Durable Power of Attorney and become incapacitated, nobody has to go 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 steer clear of having your personal affairs end up being the subject of a public proceeding.
Appointing a Successor Agent
It is often smart to appoint one or more successor Agents. The Agent you appoint in your Durable Power of Attorney may die or for some other reason become unable or unwilling to do something as your Agent. If so, you could 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 ought to be someone that has your complete trust.
Revoking a Power of Attorney
As long as you are competent, you have the energy to revoke your Durable Power of Attorney. To take action, send written notice to your Agent notifying him or her that the document has been revoked. Once the Agent has notice of your revocation, the Agent might take no further action under the Durable Power of Attorney. However, your revocation will not undo any permissible actions that the Agent has taken prior to being notified that the Power of Attorney has been terminated.
You must also notify third parties with whom your Agent has been dealing that the Durable Power of Attorney has been revoked. For example, if the Agent has been dealing with a stockbroker, you must notify the stockbroker as soon 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 steadily to rely on the Durable Power of Attorney.
Making the Durable Power of Attorney Effective upon Incapacity.
You'll be able to have a Durable Power of Attorney that only becomes effective if so when you become incapacitated. This document is referred as a "springing" Durable Power of Attorney because it "springs alive" on the occurrence of another event - your incapacity. The document should include a detailed definition of "disability" to create clear the circumstances in which your Agent may act in your stead.
Understanding that your Agent struggles to exercise his or her powers until you are actually unable to do so yourself may make using the Durable Power of Attorney convenient for you. Unfortunately, despite having an excellent definition of incapacity in the springing Durable Power of Attorney, your Agent could find that third parties are simply not willing to make the judgment that you will be indeed disabled. If they are wrong, they may be held prone to you for just about any damages that you sustain because of the error in judgment. You may therefore find the springing document cannot be relied upon in all circumstances.
Don't Procrastinate!
Estate planning is easy to place 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.