The purpose of a durable power of attorney in estate planning is to allow you to choose someone to manage your affairs in the event you become incapacitated for any reason. Whether your incapacity is temporary or permanent, a durable power of attorney will give you the peace of mind you need. Just remember that, if you want it to remain in effect during your incapacity, it must be designated as “durable.”
What does a power of attorney do in general?
A power of attorney is simply a legal document that transfers legal authority to an individual so that person can perform certain tasks on your behalf. A power of attorney can be drafted to give broad authority over your affairs or very limited power, depending on your needs and wishes. Most common are powers of attorney to handle healthcare and/or financial decisions.
Examples of common uses for a power of attorney
A power of attorney can be used to give your business partner access to certain assets for the benefit of the business, in the event you become incapacitated. Another example is giving your agent the authority to manage your rental property while you are out of the country. A power of attorney for health care can be used to appoint someone in a situation where a physician has determined you are incapacitated and unable to make those decisions yourself.
Benefit #1. You can choose your own agent ahead of time
It may seem pretty simple, but most people see it as a great benefit to be able to choose your own agent to handle your personal matters. If you don’t make that choice now, and you later become incapacitated, a judge will make that choice for you. For many clients, the ability to choose their own agent is very important.
Once you create your durable power of attorney, your agent can begin making decisions for you as soon as you want. They can do so without the need for court intervention of any kind. Without a power of attorney, the court will most likely be required to appoint a guardian to handle your affairs. Establishing a guardianship is much more expensive than simply executing a durable power of attorney. It also takes longer to complete, during which process your affairs are not being managed.
Benefit #2. You can discuss your intentions and healthcare choices with your agent now
If you use a durable power of attorney, you will have the chance to discuss your desires and expectations with your loved ones while you still can. That opportunity can be invaluable. When drafting the terms of the power of attorney, your estate planning attorney will make sure you consider how your needs may change as you get older. If you create a comprehensive durable power of attorney, you can address any necessary issues, such as the need for long-term care or government benefits.
Benefit #3. A durable power of attorney can help to avoid confusion and disagreements
Another key benefit of a durable power of attorney is the ability to eliminate confusion and ambiguity as to how you want your personal affairs to be handled. A well-drafted durable power of attorney can help you avoid family squabbles as to how your financial and health care matters should be handled.
Ultimately, when a loved one becomes ill, families should not be wasting their time arguing over decisions regarding medical treatment and finances. Instead, someone should be ready to step in and make the necessary decisions. If you plan ahead using a durable power of attorney, you can avoid this disruption.
Benefit #4. Durable powers of attorney provide a degree of asset protection
A durable power of attorney is also a good way to protect your assets, especially if the need arises for nursing home care. If you do not take the proper steps to protect your assets before becoming a resident in a nursing home, your property could be subject to payment for those nursing home services.
There are specific steps that must be taken in order to legally protect your assets, even if you are using a durable power of attorney. However, if your estate planning attorney drafts a proper durable power of attorney then asset protection is possible.
Attend a FREE seminar! If you have questions regarding the benefits of a durable power of attorney, or any other estate planning matters, contact Cochrangersh Law Offices, P.S.C. for a complementary consultation either online or by calling us at (502) 423-7023.