It is estimated that 50% of us will have memory issues or dementia as we age. One of the best ways to make sure you and your family are protected is to prepare a durable power of attorney for someone to make your financial decisions if you are unable to do so yourself. Not only will this give you the assurance that comes with knowing that your finances will be handled in the way you want, but also gives a great gift to your loved ones who would be thrown suddenly into the position of handling your affairs.
Who Will Control Your Legal Affairs?
When you execute a power of attorney, you give someone legal authority to act on your behalf. This person is called your "agent" or "attorney-in-fact." In order to make sure that this person can act on your behalf if you become incapacitated, you need to make sure that the power of attorney is a "durable" power of attorney. Otherwise, a power of attorney ends if you become incapacitated.
Worth its Weight in Gold
A Durable Power of Attorney can be worth its weight in gold. Creating one means that your family will not have to go through a guardianship process in the event of your incapacity. The guardianship process is not easy, is very expensive and is avoidable in many situations by having the correct power of attorney in place.
Not Every Power of Attorney is Equal
A power of attorney may be more important than a will or trust. You and your family should not leave this document up to a form from the internet. We see many, many inadequate powers of attorneys cross our desk. These can leave families worse off because they may rely on it until too late.
One of the most important reasons to have the best power of attorney possible is for Medicaid Asset Protection purposes. A good durable power of attorney can help make sure all of your assets do not disappear to the high cost of nursing home care. Also, a good power of attorney can help your family avoid probate by setting up a Revocable Living Trust on your behalf.
We pride ourselves with frequent changes and modifications to our power of attorney document so that it can be the best it can, leaving our clients with the best possible options to preserve their estate, avoid probate and also avoid problems.
Choosing Your Attorney-In-Fact
Choosing the person to serve as attorney-in-fact (your "power of attorney") should not be taken lightly. You need to be sure that they are a person who is responsible and follow any instructions that you leave. It is quite common to choose your spouse to be your power of attorney, but even in the case of a spouse, you should make sure that he or she is capable of making sound financial decisions.
You also need to make sure you name alternate agents in your durable power of attorney.You may want to name your spouse as your primary agent, for instance, but you should also consider the alternates. Name all of your children, for instance, if you trust them, in descending order.
Other Necessary Estate/Incapacity Planing Documents
A durable power of attorney is only one of four necessary estate planning documents. Estate Planning Documents for Everyone is a great guide to the documentation everyone needs to prepary for their death and incapacity.
Large Statutory Changes in 2011
As of October 1, 2011, the Florida Power of Attorney statute changed greatly. Importantly, the new law does not affect previously created powers of attorney, but we still advise the creation of a new document for practical reasons: once the Act has been in existence for a while, third persons (i.e., financial institutions) relying on a power of attorney will be accustomed to the requirements of the new Act. If a pre-October 1, 2011 power of attorney is presented in the not too distant future, it will likely come under heightened scrutiny, making it more difficult to have it honored by third persons. This would undermine the reason to have a power of attorney in the first place.
Learn More About Estate and Incapacity Planning
The preparation and execution of a durable power of attorneyis one of the most important legal tasks you may face. It takes considerable planning, knowledge of the law, and a thorough assessment of your situation before a document can be drafted. A good power of attorney that is carefully planned with a good elder law attorney can save your family great expense, time and difficulties in the right situation. Please att