Incapacity Planning with your Estate Planning Attorney
POWERS OF ATTORNEY
Incapacity planning is an important part of estate planning, now more than ever. Every 67 seconds, someone in the United States is diagnosed with Alzheimer’s. Incapacity can afflict people of any age – a silly accident, falling off a ladder, for example – may be all it takes. When planning for incapacity, an estate planning attorney can help you create Powers of Attorney – an important and commonly used tool. While the principal person has capacity, the principal chooses someone he or she trusts to act for him or her. The decision is not left to chance. If there are no estate planning documents in place, or there are problems with the existing documents, a conservatorship is usually the only option. This brings an expensive court-supervised process, where the court appoints someone to act.
A power of attorney is a document wherein the principal (the person signing the document) grants an agent, or an attorney-in-fact, the power to act. The power to act could be granted for a short time, or for a specific purpose. For example, the power may be granted to handle the sale of an out-of-state asset. A power of attorney that is durable remains valid during the principal’s incapacity. It must contain language which provides that it will not be affected by the subsequent incapacity of the principal, or that it shall become effective upon the incapacity of the principal. If the power of attorney does not contain the language, the agent does not have authority to act during the principal’s incapacity, springing Durable Powers of Attorney into action upon incapacity, generally with letters from two physicians, or upon an event specified in the document. Powers of Attorney can be effective immediately upon signing.
Estate Planning Experts
The proper document, correctly executed, is the key to a successful plan and to avoid a conservatorship. Where incapacity planning is the goal, the power of attorney must be durable, or effective during incapacity. Any other power of attorney defeats the purpose. The agent must be alive, available and willing to act. A durable power of attorney naming an agent who is deceased, someone the principal no longer trusts, or someone who is exercising undue influence on the principal, is ineffective. The triggering method for the springing power of attorney must also be considered. Is the principal incapacitated to the point that he or she does not understand or appreciate the fact that he or she is incapacitated? Is the principal willing to go to the doctor for the medical evaluation? Where the principal is resistant, a Durable Power of Attorney which is immediately effective is a better choice to enable the agent to act when necessary. A young person, on the other hand, may not want to grant the power to act immediately, without the safe guards of a doctor’s evaluation. If you already have documents in place, review them with your attorney to ensure that the documents are still right for you. Only you, after consulting with a estate planning attorney, can choose the power of attorney that is right for you.
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