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A durable power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you (your "agent" or "attorney-in-fact") if you become incapacitated. Without a power of attorney, your loved ones would not be able to make decisions for you or manage your finances without asking a court to appoint a guardian, which is an expensive and time-consuming process.

Life Care Planning, Estate Protection, Disability,
VA & Medicaid Assistance Lawyers

Why Can’t I Just Use an Off-the-Shelf Legal Form?

 

Asking a lawyer this question is like calling a medical doctor and asking, "Doctor, can I take aspirin for a pain in my abdominal area?" Obviously, the physician would have to examine the patient, obtain a history, etc., before he could give a reasonable reply.

 

Lawyers do not sell paper, even when the paper contains a lot of fancy words.  As legal professionals, lawyers do not sell products.  We provide services. These services include counseling as well as the preparation of legal documents. Counseling is not just about law; it also is about numerous other matters, some of which may be more important to the client and the client's family than the legal questions.

 

Power of Attorney

 

Take, for example, a power of attorney.  A durable power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you (your "agent" or "attorney-in-fact") if you become incapacitated. Without a power of attorney, your loved ones would not be able to make decisions for you or manage your finances without asking a court to appoint a guardian, which is an expensive and time-consuming process.

 

A "simple" Illinois statutory short-form power of attorney, which can be down-loaded from the internet, may be exactly what you need.  However, it may be exactly what you do not need.  A statutory short form power of attorney, without substantial customization, sometimes produces very poor results. You cannot know what kind of power of attorney is appropriate for you without receiving advice from an attorney who has taken the time to become acquainted with your desires, the assets that will be controlled by the document, the facts about your health, how the power of attorney fits into your overall estate plan, and a host of other factors.  One size truly does not fit all.

 

The agent's powers

 

The power of attorney document sets out the agent's powers. Powers given to an agent typically include buying or selling property, managing a business, paying debts, investing money, engaging in legal proceedings, borrowing money, cashing checks, and collecting debts. They also may include the power to consent to medical treatment.

 

Some powers will not be included unless they are specifically mentioned.  For example, a power of attorney agent does not have the power to make gifts or the power to change the beneficiaries you have named on your insurance policies unless the power of attorney document explicitly gives the agent those powers.

 

Why would you want your power of attorney agent to have authority to make gifts or to change beneficiaries on insurance policies?  If you want to ensure your agent has the authority to do long-term care planning on your behalf, that is, the type that is needed in order to keep the government from taking your home and all of your life-time savings in the event you need to enter a nursing home, then the power of attorney must give the agent the power to modify trusts, change beneficiaries, and make gifts. The wording in a power of attorney can be significant, so it is advisable to consult a knowledgeable and experienced elder law attorney.

 

Springing or immediate

 

The power of attorney can take affect immediately or it can become effective only after you are disabled.  In the latter case, the document is called a "springing" power of attorney. While a springing power may seem like a good idea, it can cause delays and extra expense because incapacity will need to be verified by a physician and the physician may be reluctant to breach medical confidentiality without a court order. If the power of attorney is springing, it is very important that the method for determining incapacity is clearly spelled out in the document.

 

Joint agents

 

While it is possible to name more than one person as your agent, this can lead to confusion. If you do have more than one person named, you need to be clear whether both parties need to act together or whether they can each act independently. It might make more sense and be less confusing to name an alternative agent to act in case the first agent is unable to.

 

Appointing a guardian

 

Another use of a power of attorney can be to nominate a guardian in case guardianship proceedings become necessary. Including your preference for a guardian can allow you to have some say over who will be managing your affairs. Usually, the court decides who will be chosen as a guardian, but in most circumstances, the court will abide by your nomination in the durable power of attorney.

 

Executing the power of attorney

 

To be valid a power of attorney must be executed properly. In Illinois, the power of attorney must be signed, witnessed, notarized, and recite certain statements required by statute.  And, if the document is to be used to sell or otherwise convey any interest in real estate, the name and address of the person who prepared the form must be on the document.  Given the importance of getting it done right, particularly if you want to avoid additional expense later on, you truly ought to consult with an elder law or estate planning attorney to ensure the document is executed properly.

 

Accepting a power of attorney

 

Even if you do everything exactly right, some banks and other institutions are reluctant to accept a power of attorney.  Many prefer to deal with the trustee of a trust than the agent named in a power of attorney document. These institutions are afraid of a lawsuit if the power of attorney is ruled by the court to be no longer valid.  Some banks or other financial institutions have their own standard power of attorney forms. To avoid problems, you may want to execute the forms offered by the institutions with which you have accounts. According to a MarketWatch.com article, you need to be careful that you don't sign a bank's document that inadvertently restricts a power of attorney agent's ability to deal with other assets.  In addition, the article advises that you should check that any documents you sign with a bank match your original power of attorney.

 

To read the MarketWatch.com article, go to http://www.marketwatch.com/news/story/know-how-deal-your-bank/story.aspx?guid=%7B660DE411-6EE8-442C-83CE-DE13C496DCEA%7D.

 

Richard Habiger is an elder law, VA benefits, and life care planning attorney.  You may contact him at 618-549-4529 or Richard@HabigerElderLaw.com.

 

 


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Physical Address
1808 Clark Street, Carterville, Illinois 62918
Phone: 618-985-4529
Toll Free: 800-336-4529

Mailing Address
1808 Clark Street
Carterville, Illinois 62918
Phone: (618) 985-4529