A power of attorney is a legal document that you can use to give someone else the power to make legally binding decisions on your behalf. If you are the person granting the power, you are called the principal, and the person who would be able to act as your representative would be the agent or attorney-in-fact.
Any adult who is of sound mind who is willing to act as an attorney-in-fact can assume the role. You do not have to be a lawyer to act as an attorney-in-fact.
There are general powers of attorney, and there are limited powers of attorney. If you were to grant a general power of attorney, the agent would be able to act for you in a sweeping, comprehensive manner.
With a limited power of attorney, you would include certain limitations when you execute the document. For example, you could grant an associate the power to sign a certain set of legal documents while you are in another country conducting business.
The Durable Power of Attorney
We specialize in elder law and estate planning. Elder law attorneys help people who are concerned about the eventualities of aging. In our area of the law, durable powers of attorney are often utilized to account for the possibility of latter life incapacitation.
A very significant percentage of elders become unable to handle all of their own affairs at some point in time. There are multiple different causes of incapacity, but Alzheimer’s disease is the leading threat. This disease strikes 40 to 45 percent of people who are at least 85 years of age according to the Alzheimer’s Association.
If you were to become unable to handle your own affairs, who would make decisions on your behalf? The answer to this question is entirely up to you. The state would appoint a conservator to manage your affairs if you become incapacitated without planning ahead for this contingency in advance.
On the other hand, you can be proactive. A durable power of attorney could be used to name someone to handle your decision-making in the event of your incapacitation. Because the document is durable, it would remain in effect even if you do become unable to make sound decisions on your own.
A power of attorney that is not expressly designated as durable would no longer be effective if the grantor of the device was to become incapacitated. This is the distinction that makes a durable power of attorney different.
There are financial decisions that could present themselves, and there are also medical decisions. To account for this, you could create a durable power of attorney for health care, and a durable financial power of attorney.
We should point out the fact that it is possible to create a document called a springing durable power of attorney in some states. This power would only become effective if the grantor becomes incapacitated.
Date of Termination
A power of attorney, whether it is durable or not, will terminate whenever you say that it will. When you create the document, you make all the decisions.
If you are creating a durable power of attorney to account for the possibility of incapacitation, you would probably want the power to remain in effect throughout your life, since you are addressing an end-of-life issue. However, the termination date is entirely up to you.
You could potentially create a durable power of attorney, and grant the power immediately. However, you could have your attorney store the document for you, and you would not be required to inform the agent about the existence of the document. In the future, you could let the agent know when you feel as though the time is right.
We should point out the fact that a power of attorney would no longer be in effect after your passing, and this is a limitation from an estate planning perspective.
If you were to use a revocable living trust when you are creating your estate plan, you could empower the successor trustee that you name to take over if you ever become incapacitated. This person could also administer the trust after you pass away.
Attend a Free Estate Planning Seminar
If you want to be comprehensively prepared for the eventualities of aging, you should certainly include an incapacity planning component within your broader estate plan.
There are some great opportunities coming up in the near future if you would like to obtain some detailed information about incapacity planning and other important estate planning topics. We are offering a series of free seminars, and you can visit our seminar schedule page to obtain details and registration information.