One of the most important estate planning documents is a durable Power of Attorney. If you were to become incapacitated, a durable Power of Attorney will allow someone you trust to make decisions on your behalf. A principal (the creator of the Power of Attorney document) is guaranteed that their wishes will be carried out as they had planned. Having a durable Power of Attorney document will keep the principal from needing any sort of court-appointed guardian. The attorney-in-fact (the person designated to act for the principal) is usually someone that is close to and trusted by the principal. When creating a Power of Attorney document, there are a few things you need to know, and a few you should consider with an Elder Care Attorney.
1. To Spring or Not to Spring? There are two types of Power of Attorney documents – springing and non-springing. A springing Power of attorney means that the attorney-in-fact (the person you designate) has no power to act on behalf of the principle until some event occurs – that event is up to you. Most commonly principles choose incapacity as the event where the principal is to “spring” into action. A non-springing Power of Attorney is effective immediately upon its creation. It does not require incapacity or a similar event for the attorney-in-fact to act on behalf of the principal. While a non-springing document may seem like the better choice, they are often not accepted by financial institutions due to liability. Also, if you can’t trust your attorney-in-effect not to abuse their power, they probably shouldn’t be your choice.
2. Durability is Key. A Power of Attorney that is not “durable” will essentially become void if the principal becomes incapacitated. Make sure that you work with an Elder Lawyer with Power of Attorney experience to ensure that they language in the document specifically states that it is durable (not affected by the disability or incapacity of the principal) and strong.
3. One is a Lonely Number. Being the sole attorney-in-effect can be a large burden to bear, but you can solve that by appointing more than one co-attorneys-in-fact to share the responsibilities. This is a good choice for many situations, but if your co-attorney-in-fact cannot agree or get along, it will be your estate that will suffer.
4. Be Specific about Gifts. If you intend that your attorney-in-fact should be given the power to make gifts on your behalf, then you must make sure the document includes specific authorization instructions. If you do not, the courts may rule that the gifts are void and enact significant estate taxes.
Click here to learn more about Power of Attorney. If you are considering a Power of Attorney, or if you have any inquiries as to the process, contact us or arrange a free consultation with Massachusetts Estate Planning Attorney Adam Tobin.