Gayle Reeves' Blog

General Durable Power of Attorney

Gayle A. Reeves - Sunday, April 19, 2009

Who will take care of my affairs if I can't? How will my bills get paid if I'm in the hospital? If you are asking yourself these questions there is a simple procedure available to put your mind at ease.

There is a document, called a GENERAL DURABLE POWER OF ATTORNEY that you can sign to give someone else the ability to take care of these matters in the event that you are not able to take care of them yourself.

A GENERAL DURABLE POWER OF ATTORNEY is a document in which you (the principal) give another person (the attorney-in-fact) the power to manage your property and to make decisions regarding your financial and personal matters.

An attorney-in-fact can be given as much or as little power as you choose. It may take effect immediately, at a specific date, or upon the happening of an event. It remains effective until the principal revokes it or dies. A durable general power of attorney is effective even if you should become incapacitated, incompetent or disabled.

An example of some of the powers that can be given to an attorney-in-fact are:

  • To deposit and withdraw funds from a bank account
  • Sign your name on checks
  • Handle tax matters
  • Sell personal or real property
  • Pay for services rendered to you
  • Make gifts
  • Provide for in-home services for your care instead of nursing home care.

A Power of Attorney is important as it may save your family members from having to apply to the Probate Court for Guardianship in the event you become incapacitated. A simple example of the difference between the Power of Attorney and the Guardianship involves the sale of real estate. By having a power of attorney that authorizes another to sell your real property, that person may contact a real estate agent and sell the property on your behalf.

On the other hand, if you do not have a power of attorney, someone must apply to the Probate Court for appointment as your Guardian, and than file a separate action asking the Court for authority to sell the real property. The Probate process may take six months before your Guardian is even authorized to list the real property. All of a sudden a very personal matter has become very public, as most Probate Court filings are a matter of public record.

A power of attorney may also be drafted to authorize the attorney-in-fact to carry out your estate planning goals. For example, if you typically make gifts to family members in order to reduce your overall estate value, a power to make such gifts and to file gift tax returns, if necessary, may be included in your power of attorney. If the power to make gifts is not specifically included in the power of attorney, it may cause the value of the gifts to be brought back into the estate for tax purposes.

The authority given in these documents can be exercised without the need for court supervision or authorization. Care must be given in selecting the right person to serve as your attorney-in-fact. A family member or friend in whom you have complete confidence, and who would keep good financial records, would be a reasonable choice as your attorney-in-fact.

While there are many generic forms available for powers of attorney, an attorney experienced in preparing this document can prepare a Power of Attorney that will be drafted to meet your individual needs. The attorney will also make certain that all the requirements are met in order for the document to be a valid, enforceable durable power of attorney. It is a simple procedure that can give you peace of mind in the future.