A power of attorney is a document that you utilize to name another individual who would be able to make legally binding decisions on your behalf. We practice in the elder law realm, and in our area of the law, durable powers of attorney are often utilized.
Why would you want a power of attorney if you don’t particularly want someone else to make decisions on your behalf? You would use a durable power of attorney as a preventative measure. Many elders become incapacitated late in their lives, and you could use a durable power of attorney to name someone to make decisions on your behalf in the event of your incapacitation.
There are two different durable powers of attorney that would usually be used: A durable power of attorney for health care decision making, and a durable financial power of attorney.
We should point out the significance of the “durable” designation. A standard power of attorney that is not specifically designated as durable would no longer be in effect if the person who granted the power was to become incapacitated. Durable powers of attorney do remain in effect upon the incapacitation of the grantor.
If you do nothing to prepare for possible incapacity, and you do become unable to handle your affairs, interested parties could petition the state to appoint a guardian to act as your representative. The outcome may not be consistent with your wishes, and family members may disagree during the proceeding. You can nip these pitfalls in the bud if you put an incapacity plan in place.
As the grantor of a power of attorney, you can decide on the date of termination. Powers of attorney are used for various different purposes, and people sometimes grant limited powers of attorney for limited periods of time.
However, when you are using a durable power of attorney to account for possible incapacity, you would probably want the power of attorney to stay in effect throughout your life. Any power of attorney, whether it is durable or not, will automatically terminate when the grantor passes away.
This raises an interesting possibility. If you use a last will as your vehicle of asset transfer, and you use a durable power of attorney to account for incapacity, your agent would not be empowered to administer your estate after your passing.
On the other hand, if you create a revocable living trust as an asset transfer vehicle, you could empower a disability trustee to administer the trust in the event of your incapacitation. This individual or entity could subsequently administer your estate after you are gone.
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If you would like to put an incapacity plan in place, send us a message through our contact page to set up a free consultation: Grand Forks ND Estate Planning Attorneys.