A Power of Attorney is a special estate and life planning tool, and legal document, which gives someone of your choosing the power to act in a legal capacity in your place. This creates a special trusting relationship, where the person you have appointed must act in your best interests, and not theirs or anyone else’s interests.
There are several types of Power of Attorney documents, from Limited, to Durable, and one that can only be invoked in the event of an incapacity. A Limited Power of Attorney limits the appointed person to a specific act or task, such as to purchase property. A Limited Power of Attorney will cease upon the completion of the task proscribed. A Durable Power of Attorney on the other hand gives the appointed person power to act in any allowable legal capacity necessary to benefit your interests, whether it is investing your finances, paying your bills, or purchasing or selling your property.
A Durable Power of Attorney is a useful, and sometimes necessary estate planning tool, which allows your loved ones to handle your assets when you no longer become capable to do so. However, because a Durable Power of Attorney becomes effective at the time it is executed it is a very powerful took. On the other hand, a Durable Power of Attorney would not be valid if signed by a person who does not have the legal mental capacity to do so, similar to the requirements under the law to validly execute a Last Will and Testament. Thus, a Durable Power of Attorney in Case of Incapacity, may be executed early on, but will not be given effect until a doctor or doctors declares that the declarant has an incapacity that renders him or her to be unable to manage their own affairs.
At Schmeltzer & Bostic we can assist you with determining whether you should have a Power of Attorney executed and in your estate planning arsenal, as well as why time of Power of Attorney best suits your needs.