1) How is a "durable"poadifferent from other kinds?
2) When should I make a durablepoa?
3) Who's entitled to rely on my durablepoa?4) How does my agent assume power?5) What are some important powers to include in my financial dpoa?
6) Is one dpoa good for the rest of my life?
7) What are some "human" problems associated with these
pieces of paper?
8) What changes can I make after signing apoa?
9) Does anaifget paid?
10) Can I appoint more than one person as myaif?
12) Is there anyone who SHOULDN'T have a durable power of attorney?
13) I found a great form book at the library. Why not just fill in the blanks?
1) How is a "durable"
poa different from other kinds?
A "durable" power
of attorney (dpoa) gives your agent broad powers
and remains in force even if you become incapacitated. A "general"
or "regular" poa can contain many powers, but expires
if you become disabled. Special or limited poas are most often
used in a specific situation. Say your mother, who's too old
for the Magic Kingdom, wants to sell her Orlando home and move
to an oceanfront condo. You are co-owner of the house, but can't
attend the closing. Cousin Chad in Fort Lauderdale, via a poa,
can sign papers on your behalf.
2) When should I make a durable poa?
D.C. attorney Cindy Lynn Wofford
of Ravdin & Wofford, P.C. who specializes in estate planning,
points out that "It's never too early for an adult to execute
a health care power of attorney. Accidents and serious illness
can happen at any age." Married people assume that their
spouse can handle things, but even if you and your spouse own
assets jointly, he or she won't have power over anything that
belongs to you alone, so it's important to make your spouse
your agent
3) Who's entitled to rely on my durable
poa?
For your financial poa, banks,
brokerage firms, credit card companies, and anyone else you
regularly carry on business with should get a copy. One warning:
most banks and other financial institutions have their own dpoa
forms, and may be wary of a "generic"
one, so ask if yours will be honored. Give copies of your health-care
dpoa to your doctor, your agent and close family members. "Don't
just put it in a drawer," warns Mercer Univ.
Law Professor Adam Milani, "you want the hospital or other
treatment center to know about and honor your dpoa."
4) How does my agent assume power?
You decide -- it can be effective
immediately or in the future. Suppose you state that your aif
will step in if you become "incapacitated." You can
name two doctors who must agree
that you are no longer capable. This is sometimes called a "springing"
or "contingent" poa. A doctor or your aif can make
this decision. Obviously, he or she must be someone you know
well and trust.
5) What are some important powers
to include in my financial dpoa?
Any powers authorized by your
state law that you think will be needed to handle your personal
or business finances. Two powers often overlooked are 1) the
power to deal with the IRS and 2) the power to give gifts, which
could reduce taxes on a substantial estate.
6) Is one dpoa good for the rest
of my life?
Technically, it's good until
death unless revoked. Review your document every five years
or so to make sure your needs and wishes are still the same.
If you have a major life change, such as divorce, remarriage,
or a move to another state, think about revising it.
7) What are some "human"
problems associated with these pieces of paper?
Few people enjoy being out
of control at any age. So if an older friend or relative who's
still functional signs a poa, he or she may keep a hawk eye
on things. Attorney Cindy Lynn Wofford recalls a case in which
an elderly man lived alone is a state far from his son. The
man was gave his son permission to sign checks on only one account,
although he had several. "So if Dad went into a nursing
home,", said Wofford, " when the checking account
ran out of money, the son would have no choice but to apply
for a conservatorship." Wofford advises that to prevent
suspicion or misunderstanding, "keep [the principal] in
the loop, even if it means repeating information over and over."
9) Does an aif get paid?
That depends on who you name and how complex your affairs will
be. If your aif is a close relative, he or she won't normally
be paid. But you can decide to pay them.
11) Is my attorney-in-fact liable
for mistakes?
An aif is expected to do whatever is reasonable to run your
personal or business affairs.
Sandra Foster, president of the Carat Connect, a Toronto financial
services company, points out that "your agent need only
act in what they BELIEVE is your best interests - not do exactly
what you would do." Foster advises anticipating situations
and discussing them with your agent. You can limit liability
to "willful misconduct or gross negligence", which
implies intentional or dishonest acts. And a substitute agent
isn't responsible for mistakes made before he took over.
12) Is there anyone who SHOULDN'T
have a durable power of attorney?
Yes. If your list of friends and relatives contains no one trustworthy
enough or emotionally tough enough to make health-related or
financial decisions, you may want a court-appointed conservator
or guardian. While appointing a conservator may be a hassle,
it assures that someone is watching the checking accounts. If
you don't have a dpoa, you may want to place some assets in
a living trust, especially if property to be transferred includes
real estate. Consult your lawyer.
