the many benefits of having a durable power of attorney
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Understand the role of a durable power of attorney and its importance in the event of your incapacitate.TRANSCRIPT
Understand the Role of a Durable Power of Attorney and Its Importance
in the Event of Your Incapacitation
THE MANY BENEFITS OF
STEPHEN A. UNSWORTH VERMONT ESTATE PLANNING ATTORNEY
HAVING A DURABLE
POWER OF ATTORNEY
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We receive a lot of questions every week from seniors and their caregivers.
While the questions always vary, there are a few common denominators in
many of those questions. This week, we
explore a topic that’s probably the area
that causes some confusion. That topic, of
course, is the role of a durable power of
attorney.
Every state defines its own laws on most
matters, including estate planning. There
are a lot of moving parts but it’s important
to understand that they all work (or should work) like a well-oiled machine
for the citizens in those states. That doesn’t mean our lawmakers make it
easy for us to grasp their mindset as the laws are being made. The
questions and answers below should serve as a foundation, but you should
speak to your elder care lawyer or estate planning team for more specific
information.
WHAT IS A DURABLE POWER OF ATTORNEY?
A durable power of attorney allows you to name an agent whom you trust
to make important decisions if you are unable to make those decisions
yourself. It could be that you’ve been injured, are preparing for a lengthy
surgery or you’re in the early stages of dementia or Alzheimer’s.
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WHAT HAPPENS IF I HAVE NO DURABLE POWER OF
ATTORNEY?
Again, it varies from state to state; however, if there is no durable power
of attorney, in most states, a judge decides
in guardianship or conservatorship
proceedings who will handle your affairs
and it may not be the person you would
have chosen. It’s a far more affordable
route, too. Remember, too, that when a
power of attorney is "durable," it simply
means it remains in effect even after you
become incapacitated or disabled. Your
Vermont estate planning attorney will ensure it’s durable by including a
statement similar to, “This power of attorney shall not be affected by the
subsequent disability or incapacity of the principal.”
Sometimes, a standard power of attorney is confused with a durable power
of attorney. What many don’t realize is that a standard power of attorney
does nothing if you become incapacitated or incompetent.
WHY WOULD I WANT A DURABLE POWER OF ATTORNEY?
The benefits of a durable power of attorney are many. The primary
motivation is to ensure you maintain the decision making power. Most
If the time ever comes
that you are unable to
make decisions, someone
will have to. It’s up to you
to decide who makes the
initial decision of who
that person will be.
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people don’t want a judge or court to decide who fills that role and a
conservatorship proceeding can be costly. Remember, this isn’t an option:
if the time ever comes that you are unable to make decisions, someone will
have to. It’s up to you to decide who makes the initial decision of who that
person will be.
WHAT’S EXPECTED FROM MY NAMED AGENT?
The role of the power of attorney includes management of all of the
decisions you’ve outlined in the durable power of attorney. It might be the
management of your finances, including your retirement accounts and
even property you own. They may also enter into contracts unless you
state otherwise.
That’s the beauty of a durable power of attorney – it can be as broad or
narrow as you wish.
I DON’T NEED A DURABLE POWER OF ATTORNEY. MY
WIFE CAN HANDLE EVERYTHING.
Your spouse may not have the kind of decision making powers you think.
While your husband or wife may still carry out the daily business associated
with running a household, paying bills, buying groceries, etc., should you
become mentally incapacitated, he or she will not able to alter insurance
policies or retirement accounts.
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Don’t make the mistake of believing joint ownership protects you. In
almost all cases, it doesn’t unfold that way. You should speak your estate
planning lawyer to ensure you and your spouse understand those
limitations. Your named durable power of attorney is the one person who
can make other decisions.
BUT IT SEEMS LIKE I’M TAKING A BIG RISK WITH A
DURABLE POWER OF ATTORNEY.
If you’re thinking a durable power of attorney will have a lot of control,
you’re right. And there is a risk associated with naming a durable power of
attorney even as you’re still able to
make your own decisions. This is
why it’s important to choose wisely
and have the documents quite
specific in the authority you’re
giving (and not giving) the power
of attorney.
CAN I MAKE A DURABLE POWER OF ATTORNEY THAT
BECOMES EFFECTIVE ONLY IF I BECOME DISABLED?
You can memorialize the limitations with statements that your lawyer will
include. It might include, “This power of attorney shall become effective
upon my disability.” He will be specific in those limitations and the agent
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you’ve chosen will be able to use the durable power of attorney to secure
necessary paperwork – bank statements, for instance. You can also
stipulate that the document goes into effect only after a certain threshold
is met, such as your inability to speak, during a surgery or any other
specific timeframe. That’s the best part – you choose the parameters.
CAN I NAME MORE THAN ONE AGENT?
You may name as many agents as you wish. Be sure to specify whether or
not multiple agents must act jointly or work independently. There do exist
potential problems with more than one agent. For instance, if you name
two agents to act jointly, they may disagree on a decision. Your estate
planning attorney may recommend to name one agent with an alternate
“just in case”. These quagmires only highlight the importance of choosing
carefully.
CAN I CHANGE MY MIND?
You maintain the right to alter or even revoke a durable power of attorney
provided you have the capacity to do so. Your lawyer will be able to draft
the revocation and ensure it is properly filed.
Don’t underestimate the importance of meeting with your lawyer to go
over the specifics associated with your unique needs. Once that’s covered,
the peace of mind you gain is priceless.
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About the Author
Stephen A. Unsworth has over 30 years of experience in estate planning and business
law. Stephen directs the Legacy Wealth Planning group
and devotes his practice primarily to estate planning,
elder law, asset protection, and business law. His mission
is to provide quality estate planning resources, including
assistance with Living Trusts, Wills (simple & complex),
Probate, Trust Administration, Powers of Attorney, Trusts,
Medicaid and Special Needs Planning, and Family Limited
Partnerships.
Stephen is admitted to practice law in both Vermont and
Maine. He is a member of the Vermont Bar Association, the Maine Bar Association, the
Chittenden County Bar Association, the American Academy of Estate Planning Attorneys,
the National Academy of Elder Law Attorneys, and the Vermont Bar Association’s Elder
Law and Probate & Trust Sections.
He previously served as a member of the Board of Governors of the AAEPA, President of
the Chittenden County Bar Association, and Chairman of the Vermont Bar Association
Continuing Education Committee for which he was awarded a certificate for being an
outstanding chairperson. Stephen was also awarded a certificate of appreciation from a
Vermont Administrative Judge for his work as an Acting Judge in Small Claims Court. He
regularly presents at continuing legal education seminars for attorneys and paralegals in
Vermont and has taught business law courses at both the University of Vermont and
Champlain College.
Stephen has been named a “Super Lawyer” by the New England Super Lawyers
Magazine each year since its creation in 2007. This distinction- based on peer
nomination, extensive polling, and independent research- ranks him in the top 5% of
lawyers in New England.
Unsworth Law, PLC
www.unsworthlaw.net
Railroad Avenue Partners, Professional Building
26 Railroad Ave.
Essex Junction, VT 05452
Phone: (802) 879-7133