Do you have an estate plan right now? How old is it? When did you last review it? Your estate plan is an important tool that can help you protect not only yourself but your loved ones, your business, and plan forward to create the legacy that you want to leave at the end of your life. When you work with an estate planning attorney, however, your attorney is going to discuss with you not only the planning for the end of your life but also the planning you need to protect yourself during your life.
One of the most important legal planning tools you need to protect yourself during your lifetime is the durable power of attorney. This legal planning tool allows you to name a person who you trust as your agent, or attorney-in-fact, who will have legal authority to act on your behalf should you not be able to. Your agent could take a number of actions on your behalf including, but not limited to, paying your bills, ensuring you are paid on time, managing your finances, applying for public benefits, managing real estate transactions, and so much more. The “durability” aspect of the power of attorney ensures that your agent is able to act at the time you are incapacitated.
With all the positive reasons why you would create a durable power of attorney, what could be the issues that arise? Let us share a few considerations here with you in our blog.
1. Loss of control over yourself and your finances. Naming another individual as your agent means giving them significant control over your affairs. Depending on the scope of the document you create, your agent may have the ability to make decisions and take actions that could have long-lasting consequences. Be sure to discuss this in detail with your estate planning attorney.
2. Your financial institution refuses to recognize the document. Even though your durable power of attorney is a legal document as stated above it provides a tremendous amount of power to your agent. There are often times when your financial institution will not immediately recognize the legitimacy of your estate planning. Discuss with your estate planning attorney what steps can be taken to minimize this inconvenience and how they can help you.
3. Using a copy as an original. For ease of use, the copy of your durable power of attorney may be able to be used with the same ease as the original. Carefully consider not only who you want to notify not only of its creation but who has the authority to act. This is an important conversation to have with your estate planning attorney.
4. Choosing the right agent. You need to choose someone that you trust. While you may choose someone you believe to be trustworthy, there is always a risk that the agent may abuse his or her authority or act in their own self-interest. This can be particularly concerning if you are in a vulnerable position or if there is a lack of transparency in the agent’s actions. Ask your attorney if you have these concerns. Your attorney may be able to recommend a professional who is bonded and licensed to provide you with the support you need.
5. Potential for misuse or waste. While most agents act responsibly and in your best interests, there is always the concern for misuse, waster, and even abuse of the legal authority granted through the durable power of attorney. Carefully discuss with your estate planning attorney what could be done to limit this potential. Consider also naming a second or third in command within your estate planning document in the event your chosen agent is no longer able to act.
Even with these potential issues, your durable power of attorney is a powerful and important tool to add to your estate planning arsenal. Planning for the future is critical to ensure that your goals for the end of life are achieved. We know this article may raise more questions that it answers. We do telephone, computer, and face-to-face appointments. Our face-to-face appointments are held outside in the open air (frequently selected by clients for document signing) and inside our office conference room. We follow all CDC guidelines. Our office procedures adhere to COVID-19 safety protocols and are designed and enhanced by medical review and air quality engineering.