The Durable Power of Attorney (POA) is a very important tool used in senior planning. A POA is a written document that allows you, the senior, to designate a trusted agent (your “attorney-in-fact”) to step in and make legal, banking, and other financial decisions on your behalf if and when you become incapacitated. It is called “Durable” because it remains valid even if you have lost your mental capacity – – the precise time a POA is most essential.
So often I hear my senior clients express fear that the POA signals a loss of control over their lives. They consider it a step in the wrong direction. Nothing could be further from the truth. In fact, taking the time to discuss the particulars of the POA with an elder law attorney, including who is best suited to act as your agent and the powers you will grant them, gives you much greater influence over your future.
Think about it this way. If you do not have a POA and you become unable to manage your own affairs, decisions will still have to be made for you, however, these important decisions will be made by a court appointed guardian after a costly, lengthy, and impersonal court proceeding. You will have no control over who the court appoints as your guardian. The Judge, who does not know you, will be making decisions that impact your future and may not choose the person you would prefer.
In addition, under a guardianship, your representative may have to seek court permission to take planning steps that he or she could implement immediately under the POA.
All of these factors demonstrate how important it is to plan ahead – otherwise you end up having less control, having more risk and spending more money than you would by planning now and executing a properly drafted POA.
“Who should I appoint as my agent?” Many of my clients lose sleep over the answer to this question. Asked another way, “Who do you closely trust to act on your behalf should you lose mental capacity or become physically incapacitated for a long period of time?” When you select your agent, you need to designate someone in whom you have a high level of trust and comfort. This person does not have to be your oldest child or even a family member. It should be a very honest person who you trust today. Don’t let the unpredictability of relationships paralyze your decision. Remember, if your relationship with your agent changes, you can always replace your agent or revoke your POA.
Most POAs take effect immediately upon their execution, even if the understanding is that it will not be used until or unless you become incapacitated. For added security, I recommend that you hold onto your POA until it becomes necessary; but it is imperative you tell your agent where the document is kept should it become necessary.
Your POA needs to be comprehensive enough for your agent to make decisions and take the necessary actions to protect you, your money and your property. For example, a properly drafted POA can be used to make gifts to family members beneficial for tax purposes and often crucial for Medicaid planning and eligibility. Do not fall victim to the drug store form. It is simply not powerful enough and does not comply with the Maryland General & Limited Power of Attorney Act, effective October 1, 2010.
Having a POA that is properly drafted by an elder law attorney assures that your unique concerns are addressed and that the best possible actions are taken on your behalf in a difficult situation.
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Seniors Gain More Control Over Their Future With A Durable Power Of Attorney
The Durable Power of Attorney (POA) is a very important tool used in senior planning. A POA is a written document that allows you, the senior, to designate a trusted agent (your “attorney-in-fact”) to step in and make legal, banking, and other financial decisions on your behalf if and when you become incapacitated. It is called “Durable” because it remains valid even if you have lost your mental capacity – – the precise time a POA is most essential.
So often I hear my senior clients express fear that the POA signals a loss of control over their lives. They consider it a step in the wrong direction. Nothing could be further from the truth. In fact, taking the time to discuss the particulars of the POA with an elder law attorney, including who is best suited to act as your agent and the powers you will grant them, gives you much greater influence over your future.
Think about it this way. If you do not have a POA and you become unable to manage your own affairs, decisions will still have to be made for you, however, these important decisions will be made by a court appointed guardian after a costly, lengthy, and impersonal court proceeding. You will have no control over who the court appoints as your guardian. The Judge, who does not know you, will be making decisions that impact your future and may not choose the person you would prefer.
In addition, under a guardianship, your representative may have to seek court permission to take planning steps that he or she could implement immediately under the POA.
All of these factors demonstrate how important it is to plan ahead – otherwise you end up having less control, having more risk and spending more money than you would by planning now and executing a properly drafted POA.
“Who should I appoint as my agent?” Many of my clients lose sleep over the answer to this question. Asked another way, “Who do you closely trust to act on your behalf should you lose mental capacity or become physically incapacitated for a long period of time?” When you select your agent, you need to designate someone in whom you have a high level of trust and comfort. This person does not have to be your oldest child or even a family member. It should be a very honest person who you trust today. Don’t let the unpredictability of relationships paralyze your decision. Remember, if your relationship with your agent changes, you can always replace your agent or revoke your POA.
Most POAs take effect immediately upon their execution, even if the understanding is that it will not be used until or unless you become incapacitated. For added security, I recommend that you hold onto your POA until it becomes necessary; but it is imperative you tell your agent where the document is kept should it become necessary.
Your POA needs to be comprehensive enough for your agent to make decisions and take the necessary actions to protect you, your money and your property. For example, a properly drafted POA can be used to make gifts to family members beneficial for tax purposes and often crucial for Medicaid planning and eligibility. Do not fall victim to the drug store form. It is simply not powerful enough and does not comply with the Maryland General & Limited Power of Attorney Act, effective October 1, 2010.
Having a POA that is properly drafted by an elder law attorney assures that your unique concerns are addressed and that the best possible actions are taken on your behalf in a difficult situation.
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