Sometimes an individual wants to empower another person to act on his or her behalf in a legally binding manner. There are various different reasons why this dynamic may be in place, and the situation can be addressed through the creation of a legally binding document called a power of attorney.
To provide a simple overview, the person who is granting this power to another is called the principal or the grantor. The individual who is going to be empowered to make decisions on behalf of the grantor is called the agent or attorney-in-fact.
Don’t be thrown by the term “attorney-in-fact.” The person who is going to act as the grantor’s representative does not have to be a lawyer. Any adult of sound mind who is willing to act as the agent can do so.
There are different types of powers of attorney. A general power of attorney could be used to give the agent broad latitude. The agent would have sweeping power to enter into most types of legally binding agreements on behalf of grantor.
This is a great deal of power to give to another person, but sometimes it is necessary, because the grantor is unable to be physically present for an extended period of time.
A limited power of attorney could also be created. With this type of power of attorney, the attorney-in-fact is given limited power to act on behalf of the grantor. It is up to the grantor to decide on the nature of the limitations.
Durable Powers of Attorney
Our firm places an emphasis on elder law and estate planning. In our area of the law, durable powers of attorney are very important.
To understand the value of a durable power of attorney, you need to know some things about incapacity among elders. People are living longer and longer lives, and incapacity becomes a real threat as you enter the latter stages of your life.
Alzheimer’s disease strikes 40 to 45 percent of people who are at least 85 according to the Alzheimer’s Association. This is a rather eye-catching statistic, but you also have to consider the fact that there are other causes of incapacity.
If you live to an advanced age, it is very possible that you will become unable to handle your own affairs. Under these circumstances, a guardian could be appointed by the state to act on your behalf if you take no steps in advance to prepare for this contingency.
You would probably prefer to take the matter into your own hands. This is where durable powers of attorney come in.
The “durable” designation is quite relevant here. A standard power of attorney that is not specifically designated as durable would no longer be in effect if the grantor of the power was to become incapacitated.
A durable power of attorney would remain in effect, and this is why you would want to use a durable power of attorney when you are creating an incapacity plan.
There are health care decisions that may present themselves, and there are also financial decisions. You could execute two different durable powers of attorney for each respective purpose.
The person that you want to empower to handle your financial affairs may not be the same person that you would like to empower to make health care decisions on your behalf. If this is the case, it would be possible to name two different agents when you create the documents.
When durable powers of attorney are in place, there would be no need for a guardianship, and your own hand-picked decision-makers would be empowered to manage your affairs in the event of your incapacitation.
Schedule a Consultation
As you can see from this blog post, incapacity planning is an important piece to the puzzle if you want to maturely and pragmatically prepare yourself for the contingencies that elders often face.
When you embed this component within a broader, custom crafted estate plan, you can be fully prepared every step of the way. There can be representatives that you have chosen standing at the ready to act for you if it ever becomes necessary.
Ultimately, your assets can be properly distributed among your loved ones after you pass away. This takes careful and informed planning, so you should discuss everything in detail with a licensed estate planning attorney so you can be sure that you are taking all the right steps.
We are here to help if you are ready to take action. Our firm offers no obligation consultations, and you can drop us a line through our contact page or call us at 860-548-1000 to set up an appointment.