Powers of Attorney
Most people know that they should have a will in place so their estate can be administered and distributed to beneficiaries efficiently upon their death.
However, unlike wills, powers of attorney address how assets are handled during one’s lifetime in the event of a disability, not death. If you become disabled and are not able to make decisions on your own, the person you appoint as your agent in a power of attorney will be able to make decisions about your financial matters and act on your behalf to preserve and use your assets for your benefit. This person should be someone you trust and a person who can exercise good business judgment.
The experienced attorneys at Eric O. Moody & Associates will make sure that your interests are served and your needs are met.
Preparing for the possibility of disability is not usually at the forefront of our minds, but planning ahead for a situation of incompetence has many benefits and could save you money in the event of disability.
What is a Durable Power of Attorney?
You may have heard people use this phrase or talk about this document, but do you know how valuable and powerful a durable general power of attorney can be if drafted well? Let’s take a look at the various parts of the title of the document, and then examine some of its many uses.
We begin with the simple phrase “power of attorney.” This legal concept allows one person to grant to another person the power to do what he or she could do if present and available to accomplish a task. Instead, another person, the “agent” or “attorney-in-fact” is designated in writing to perform whatever task needs doing. The transfer of powers and authority is based on the legal theory of “principal-agent.” The principal grants certain authority, broad or narrow, limited in time or unlimited, and effective right away or only upon the occurrence of something in the future. These features bring us to the second part of the description above.
Typically we categorize powers of attorney into two broad categories, specific or general. A “specific” power of attorney is usually drafted to perform just one task. The most common example is the purchase or sale of a house where one of the two who are buying or selling cannot attend the closing. That person would grant and provide a specific power of attorney to the party who could attend, authorizing that party to sign his or her own name on the closing documents and, in addition, to sign the name of the person who was absent using the authority of the specific power of attorney. Once the closing was finished, the specific power of attorney would have no further power.
In contrast, a “general” power of attorney often has many, many categories of powers listed and also typically includes multiple paragraphs describing broad categories of activities and functions that the principal wants the agent capable of doing in his or her absence. When the word “durable” is added to the title of the document and expressed in the body of the document, it means that the principal intends for the powers of the agent to continue even if the principal has lost the capacity, temporarily or perhaps permanently, to competently make decisions. For a person who is competent and legally responsible for his or her actions, the grant of a power of attorney can be withdrawn as a matter of right. If that same person has lost the legal capacity to act, he or she is signaling by the word “durable” that the agent should continue exercising the powers of the durable general power of attorney throughout the period of incapacity, no matter how long that period might last.
A guardianship can also help you or your family take care of the affairs of a disabled loved one who did not establish a power of attorney before their disability. If this is the case, it will be necessary for someone to obtain guardianship. Guardianship essentially allows a person to do what they could do under a power of attorney. However, obtaining guardianship cost more time and money because it requires proceedings before a judge in court.
Contact Eric O. Moody & Associates today for your Will, Power of Attorney or Guardianship needs!