Why You Should Establish a Durable Power of Attorney

Save time and money while preparing for the worst in Massachusetts

By

“Often when I see clients who want to develop an estate plan, they’re thinking about what happens to their wealth at their death. They want to be mindful of how that’s distributed,” says Melissa Langa, an attorney with Bove & Langa in Boston. “But what they’re not thinking about is something short of death: incapacity. When you talk about what happens to their wealth during incapacity, they get nervous because they don’t want to make their family go into court to get a conservator and a guardian appointed. They’re usually very happy to learn they can avoid that by executing incapacity documents, which are a durable power of attorney and health care proxy.”
 
A power of attorney is a relatively simple legal document in which you grant another the authority to act on your behalf (as your “attorney in fact”), often for a specific purpose, such as to sign legal documents when you can’t be present, or to withdraw money from an account if you’re away. You can also grant more comprehensive powers of attorney in regards to money, property, contracts and other financial or business affairs. It’s common for people leaving for a military deployment, for example, to appoint an individual to manage their finances while they’re out of the country.
 
A standard power of attorney (POA) ceases to be in effect, however, should you become legally incapacitated. If something were to happen leaving you unable to give legal consent, the only way to manage your affairs would be for your loved ones to seek a conservatorship or guardianship.
 
“Those are time consuming and costly,” Langa says. With a durable power of attorney, you save money and “eliminate people fighting over the position, which can happen. Multiple people want to handle the money or decide what happens in a medical arena. If you can do those documents in advance, it goes a long way to stopping a fight.”
 
A durable POA is one that either takes effect immediately or after an event occurs. “And then it springs to life,” Langa says. “The most common is triggered upon incapacity. I don’t like springing personally because it can be hard to define the trigger event and you have to prove it over and over.” Every time the agent needs to make a decision on behalf of the principal, a financial institution may again require proof of incapacity. “You could see how that could get cumbersome.”
 
Setting up a durable power of attorney doesn’t require much time or money, Langa says. An attorney will set up a conference with you and ask several questions. “Sometimes they have to make decisions and think about it, but once I have all the answers, drafting the documents is not that time-consuming,” Langa says. From there the attorney will review the document with you, ask you to sign it, and at that point it’s effective.
 
If you plan to do it on your own, there are some red flags. “A lot of people think it’s an off-the-shelf document where all you’re doing is inserting names, but it’s beyond that. There’s a lot of important issues to think through,” Langa says. “I’ve spent a lot of time fixing mistakes because someone was doing it through a document preparation site online. There’s not always a problem, but I’ve done it several times.”
 
Your assets and other variables in your circumstances can make these document filings more difficult, but a reputable Massachusetts estate planning attorney works on these regularly and knows how to cover all the bases. “For example, sometimes you may want your spouse to have very broad powers, but if for some reason they become incapacitated or die, you might not want the successor to have as broad of powers. All of these things need to be thought through,” Langa says. “All families are different.”
 
Capacity to execute a POA is similar to the standard for a will: you must be 18 or older and understand the nature of your property and of the documents you’re signing. Make sure that your agent(s) has copies of the signed documents and that they know where to find the originals. Don’t keep your originals in a safety deposit box or safe that can’t be accessed immediately if something happens to you.  

Massachusetts

With a durable power of attorney, you save money and “eliminate people fighting over the position, which can happen. Multiple people want to handle the money or decide what happens in a medical arena. If you can do those documents in advance, it goes a long way to stopping a fight.”

Other Featured Articles

How to Make Divorce Faster, Cheaper and Smoother

Getting Divorced in Southern California

 

Massachusetts’ New Earned Income Tax Credit and Your Tax Return

Qualification considerations and what you can expect

 

Florida’s New GPS Law and Where It Applies

Private citizens who use GPS devices against others now face criminal prosecution and penalties

 

See More Legal Issue Articles »

Share:
Page Generated: 0.14270806312561 sec