ESTATE PLANNING, WILLS & TRUSTS
DURABLE POWER OF ATTORNEYS
Dealing With Incapacity
When a person (the Principal) signs a General Durable Power of Attorney, he or she gives another person (the Agent) the authority and power to act on the Principal's behalf in managing the financial affairs of the Principal. The Agent is essentially empowered and has the authority to do anything the Principal could do regarding the Principal's own financial affairs. The powers of the Agent terminate upon the death of the Principal.
The Durable provision of the Power of Attorney provides that the Agent's powers continue after the Principal's incapacity. This allows the Agent to manage the financial affairs of an incapacitated person without court intervention or approval, making it a valuable planning tool.
Without a General Durable Power of Attorney, the financial affairs of an incapacitated person could only be managed by a Conservator who was appointed by the Probate Court after a legal proceeding wherein the person was legally declared to be incapacitated. The Conservator would then be subject to the ongoing supervision of the Probate Court and would be required to file an initial Inventory and Appraisement and annual Accountings with the Probate Court.
A Durable Power of Attorney can be effective immediately upon execution of the document, or the powers of the Agent can spring into existence upon the incapacity of the Principal. In the case of a springing Durable Power of Attorney, the term "incapacitated" should be clearly defined. A typical provision might state that the Principal is deemed to be incapacitated when, in the written opinion of two licensed physicians, the Principal is unable to properly handle his or her own financial affairs due to illness or mental or physical disability.
A Power of Attorney can either be general or specific. A Specific Power of Attorney is used for a specific act or transaction such as authorizing an Agent to act for the Principal at a real estate closing if the Principal is going to be unavailable.
A General Durable Power of Attorney should generally be implemented as part of a client's overall estate plan and the Law Office of John Kachmarsky can assist you in preparing one.
Contact us today to discuss your immediate estate planning needs and long-term wealth preservation goals.