Planning for incapacity is one of the most essential, and often overlooked, components of a complete estate plan. A Durable Property Power of Attorney enables you to nominate an agent, and ideally a backup agent, who can act on your behalf to manage your property and finances. The Power of Attorney can be effective immediately upon execution or may be designed to become effective in the event that you become incapacitated in the future (“springing”).
It is important to understand that not all Powers of Attorney are created equal. The drafting Attorney must assess your current needs and also consider potential situations where expanded powers may be appropriate in the future. Two important provisions that are often erroneously omitted from many Powers of Attorney include a gifting provision and the power to establish an Irrevocable Trust. Without these powers, your Agent may be unable to take steps to protect your assets if long term care (e.g. nursing home care) is needed down the road. Finally, the Power of Attorney should be “durable” through the event of incapacity to avoid an unintended revocation of authority if you become incapacitated after execution of the document.
While the Durable Property Power of Attorney addresses financial decisions and property management, a Health Care Power of Attorney enables you to nominate an Agent to make medical decisions on your behalf if you are unable to speak for yourself. This document is often paired with a “Living Will,” commonly called a “Declaration of a Desire for a Natural Death,” which allows you to specify your wishes regarding life support and tube feeding in the event that you are diagnosed with a permanent vegetative state or a irreversible terminal condition.
Without these documents in place, it may become necessary for your family to petition the court to be appointed as your Guardian and/or Conservator. This process is expensive and takes time; furthermore, the appointed Guardian and/or Conservator is required to keep meticulous records and report to the court on an annual basis. The execution of a well-drafted Durable Property Power of Attorney and Health Care Power of Attorney is the best way to make sure your interests are protected in the event of incapacity without forcing your loved ones to endure the tedious process of Guardianship and/or Conservatorship.