Most people are aware of the fact that a power of attorney is a document that is used to give someone the ability to act as your legal agent. You could execute a general power of attorney that gives your appointee sweeping power to act in your behalf in all matters, or a limited power of attorney that is restricted to certain matters or even a single transaction.
Estate planning attorneys routinely use powers of attorney to help their clients prepare for the possibility of incapacitation. The fact is that people are living longer all the time, with people 85 years of age and older being the fastest-growing segment of the population. We’ve all heard of Alzheimer’s disease and how it can cause dementia and render people unable to make sound decisions for themselves. The fact is that around 40% of people who reach the age of 85 do in fact contract Alzheimer’s disease, so when you combine this statistic with the reality of expanding lifespans the need for incapacity planning becomes clear.
When you are creating your long-term plan you need to identify who you would like to appoint to handle your financial and medical affairs in the event of your incapacitation. Standard powers of attorney do not remain in effect after the incapacitation of the grantor; durable powers of attorney are utilized because they do indeed remain in effect should the grantor be deemed incapacitated.
However, some people don’t feel entirely comfortable handing over this power while they’re still capable of making their own decisions. As a response you can create what is called a “springing” durable power of attorney. Unlike the durable power of attorney, this instrument “springs” into effect upon the incapacitation of the grantor. In other words, the attorney-in-fact cannot act on behalf of the grantor until and unless he or she becomes incapacitated.
Latest posts by Saul Kobrick (see all)
- Will Robots Care for the Elderly In the Not Too Distant Future? - July 26, 2018
- Understanding How Social Security Works to Fund Your Retirement - July 24, 2018
- 6 Important Estate Planning Considerations – Part 6: Taxes - July 19, 2018