A durable power of attorney is an extremely important estate planning tool, even more important than a will in many cases. This crucial document allows a person you appoint — your “attorney-in-fact” or “agent” — to act in place of you — the “principal” — for financial purposes when and if you ever become incapacitated due to dementia or some other reason. The agent under the power of attorney can quickly step in and take care of your affairs.
But in order to execute a power of attorney and name an agent to stand in your shoes, you need to have capacity. Regrettably, many people delay completing this vital estate planning step until it’s too late and they no longer are legally capable of doing it.
What happens then? Without a durable power of attorney, no one can represent you unless a court appoints a guardian. That court process takes time, costs money, and the judge may not choose the person you would prefer. In addition, under a guardianship, the representative may have to seek court permission to take planning steps that he or she could have implemented immediately under a simple durable power of attorney.
This is why it’s so important that you have a durable power of attorney in place before the capacity to execute the document is lost.
Because you need a third party to assess capacity and because you need to be certain that the formal legal requirements are followed, it can be risky to prepare and execute legal documents on your own without representation by an attorney. In addition, you may leave out crucial authority that your agent will need. This is especially important when it comes to Medicaid, VA, and other public benefits planning. Without broad authority to complete extraordinary transactions on your behalf, your agent may not be able to complete the asset protection you sought when executing the durable power of attorney.
To execute a durable power of attorney before it’s too late along with the rest of your comprehensive estate plan, contact us today. We can assist you in preparing a plan that contains everything you and your family needs to provide peace of mind and future protection.