A power of attorney is a legally binding device that is used to empower someone else to act on your behalf. When you create a power of attorney, you are called the grantor or principal. The individual that you name to act as your representative is called the agent or attorney-in-fact.
Powers of attorney are used across the legal field for various different purposes. In the field of estate planning, they are typically used to account for the possibility of incapacity.
Incapacity Planning
Estate planning is widely thought of as a purely financial endeavor, but there is more to it if you want to be comprehensively prepared. You should also consider the eventualities of aging, and you should take steps to prepare in advance.
Incapacity is very common among elder Americans. The term “oldest old” is used in geriatric circles to describe people who are at least 85 years of age. This segment of the population grew faster than any other between the years 2000 and 2010 according to the United States Census Bureau.
The Alzheimer’s Association tells us that upwards of 40 percent of the oldest old are suffering from Alzheimer’s disease. Alzheimer’s alone is enough to make incapacity planning important, but Alzheimer’s is not the only cause of incapacity.
If you were to become incapacitated without taking any steps in advance to prepare for this contingency, a guardianship proceeding could be convened. The state could appoint a guardian to act on your behalf. It is possible that this individual would not be someone that you would have chosen yourself when you were of fully sound mind.
You don’t have to worry about a future guardianship proceeding if you have the foresight to act in advance. Incapacity planning will involve the execution of legally binding documents called durable powers of attorney. With these documents you name people to act on your behalf in the event of your incapacitation.
Durable powers of attorney are used because they do in fact remain in effect even if you become incapacitated.
Effective Date
Now that we have provided the necessary background information, we can answer the question that serves as the title of this post. You have the power to decide when a durable power of attorney will go into effect. Because you do not know if or when you will become incapacitated, you may want to have the power go into effect immediately.
It is also possible to execute a springing durable power of attorney in some jurisdictions. This type of power of attorney would only become effective if you were to become incapacitated.
Incapacity Planning Consultation
If you have further questions about incapacity planning and powers of attorney, we can help. Our firm offers free consultations to people in and around Grand Forks, North Dakota, and you can request an appointment through our website.
- Can a Party Refuse to Honor a Power of Attorney? - September 17, 2020
- Why Estate Planning Is Crucial for a Blended Family - September 15, 2020
- Building Flexibility into Your Plan - September 10, 2020
