By: Brandon S. Thomson, Esq.
The unfortunate truth–there may come a day when you may no longer be able to make decisions and care for yourself. Incapacity can strike in several ways: an accident at work, car crash, mental illness, and of course the more common incapacities resulting from aging (alzheimer’s, dementia). Long-term incapacity is not an easy fate to consider, but it must be prepared for.
When incapacity strikes, making a durable power of attorney ensures that someone you trust (usually called your “agent” or “attorney in fact”) will be on hand to manage the many practical, financial tasks that will arise if you become incapacitated. For example, bills must be paid, bank deposits must be made, and someone must handle insurance and benefits paperwork.
Many other matters may need attention as well, from handling property repairs to managing investments or a small business. In most cases, a durable power of attorney for finances is the best way to take care of tasks like these. By appointing the person you want to act on your behalf if you become incapacitated, you can spell out specific instructions for your agent to follow in managing your personal care or property.
If a Power is not properly executed, most frequently the family members, with the assistance of a lawyer, will petition the court in a guardianship action, which is a very lengthy, expensive and sometimes, a humiliating process.
Generally, there are two types of Powers of Attorney. A ‘durable” Power takes effect the moment the document is executed, and continues even if the principal subsequently becomes disabled or incompetent due to sickness, accident or age. The document must include language that “This power of attorney will remain effective despite the subsequent disability of the principal.” At the time of the principal’s death, the grant of authority terminates but can be revoked by the principal at any time during capacity. It is imperative to select an agent that is trustworthy like a spouse, child, or long time friend.
The second type is known as a “springing” Power. This document becomes effective only in the event the principal becomes disabled. This type of power can lead to a number of problems, and may want to be avoided in favor of a “durable” Power.
Before executing a Power of Attorney it is critical you discuss it with an attorney who specializes in the area of Estate Planning. For a free consultation contact Foley & Robinette, P.C., by phone (734) 283-4000, and ask for either Attorney Dean Robinette or Attorney Brandon Thomson. Another option is the fill out the contact form below.
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