Not all estate planning is in anticipation of death. Powers of Attorney allow people to also plan for their own incapacitation. Generally, Powers of Attorney come in two forms: the General/Durable Power of Attorney, and the Healthcare Power of Attorney.
For the purposes of this post, I’ll be discussing only the Durable Power of Attorney. StephensonLaw has a preference for Durable, rather than General, Powers of Attorney because they survive the incapacity of the principal. Durable Powers of Attorney relate to the financial matters that people encounter on a daily basis. Have you ever wondered what would happen if you were in a horrible accident which left you incapacitated for an extended period of time? Who would take care of your finances and pay your bills? What if you need to execute an important financial document but are unable to?
Durable Powers of Attorney allow you to appoint an agent to act on your behalf in financial matters, including executing documents on your behalf, moving money, managing accounts, or even executing a deed to your home.
If you are in an accident and are permanently incapacitated, your family will need to take control of your assets in order to care for you. Without a Durable Power of Attorney, they will have to go through a cumbersome and potentially expensive court proceeding to establish a guardianship over you. Using a Durable Power of Attorney as part of your estate plan will save your family the time and effort – they should be taking care of you, not going back and forth to court.
An important aspect of the Durable Power of Attorney is the principal’s ability to change, limit, or revoke it whenever appropriate. However, they normally have to be recorded with your local Register of Deeds in order to be effective.