A power of attorney serves many purposes and there are many different types of these important legal documents. One of the most confusing powers of attorney is the durable power of attorney. This week, we explore these estate planning documents, their benefits and any downsides so that you can make a better choice for you and your family.
As you probably know, each state defines its own laws on most matters, including estate planning. There are a lot of moving parts but it’s important to understand that they all work (or should work) like a well-oiled machine for the citizens in those states. This is often at the root of confusion. The questions and answers below should provide the basic answers, but you should speak to your estate planning lawyer for more specific information related to your state and your unique needs.
What is a Durable Power of Attorney?
A durable power of attorney allows you to name an agent whom you trust to make important decisions if you are unable to make those decisions yourself. It could be that you’ve been injured, are preparing for a lengthy surgery or you’re in the early stages of dementia or Alzheimer’s.
Why would I want a durable power of attorney?
The benefits of a durable power of attorney are many. The primary motivation is to ensure you maintain the decision making power for as long as possible. Most people don’t want a judge or court to decide who fills that role and a conservatorship proceeding can be costly. Remember, this isn’t an option: if the time ever comes that you are unable to make decisions, someone will have to. It’s up to you to decide who that person will be; but if you don’t, the judge will.
What’s expected from my named agent?
The role of the power of attorney includes delegating management of all of the decisions you’ve outlined. It might be the management of your finances, including your retirement accounts and even property you own. Choose carefully, because this person may also enter into contracts unless you make it clear that’s not an option.
That’s the beauty of a durable power of attorney – it can be as broad or narrow as you wish.
I don’t need a durable power of attorney. My husband can handle everything.
Your spouse may not have the kind of decision making powers you think. While your husband or wife may still carry out the daily business associated with running a household, paying bills, buying groceries, etc., should you become mentally incapacitated, he or she may not be able to alter insurance policies or retirement accounts.
But it seems like I’m taking a big risk with a durable power of attorney.
If you’re thinking a durable power of attorney has a lot of control, you’re right. And there is a risk associated with naming a durable power of attorney even as you’re still able to make your own decisions. This is why it’s important to choose wisely and have the documents quite specific in the authority you’re giving (and not giving) the power of attorney. The right estate planning lawyer will be able to put those protections in place.
Don’t underestimate the importance of meeting with your lawyer to go over the specifics associated with your unique needs. Even if you don’t like the durable aspect of a particular document, there are others that can provide more of what you’re looking for. Once that’s covered, the peace of mind you gain is priceless. To learn more, contact DeBruyckere Law Offices at (603) 894-4141 or (978) 969-0331.
- Building Flexibility into Your Plan - September 18, 2020
- Planning for Incapacity - September 16, 2020
- Will Your Estate Plan Still Work If You Move? - September 10, 2020
