POWERS OF ATTORNEY  
TOPICS
  1. DEFINED
  2. TYPES OF POWERS OF ATTORNEY DOCUMENTS
  3. USING THE OFFICE SUPPLY STORE FORM OR FORM OFF THE INTERNET
  4. WHICH ONE SHOULD THE OVER 65 HAVE AND WHY HAVE ONE?
  5. SHOULD I OR SHOULDN’T I?
   
DEFINED  
A document that allows a person to appoint/name a trusted friend/family member to act on his/her behalf.

A power of attorney document primarily deals with a person’s financial accounts, real estate, and investment affairs.

In the context of those over the age of 65, or disabled, the contents of the power of attorney will address many other issues that a power of attorney drafted for a younger or healthier client may not. These issues may include:

Issues around Medicare, Medicaid, gifting pursuant to the IRS allowable rules and regulations, care management, dealing with Trusts.

  
 
TYPES OF POWERS OF ATTORNEY DOCUMENTS  
Durable Power of Attorney:
This is the document elderly clients typically should look to have. It allows a person to appoint a trusted friend or relative to handle his/her financial affairs.

This document helps avoid the need for courts to appoint a guardian in the event a person becomes unable to handle his/her own financial and real estate affairs.

There is key legal language in this document that allows it to survive the incapacity of the person who signed it.

It can be used the minute the creator completes it unless the creator conditions its use on a future event such as incapacity (Then called a “Springing Power of Attorney”)

The general power of attorney and specific power of attorney (described below) cannot be used if the person who signed it becomes incapacitated.

General Power of Attorney:
Typically allows the appointed individual (called an attorney-in-fact) to do any acts the person who created the document could do himself or herself.

A general power of attorney is not effective if the creator becomes incapacitated or dies.

It can be used the minute the creator completes it.

Specific Power of Attorney:
Most commonly seen in real estate transactions (Real Estate Specific Power of Attorney)

Has the same characteristics as a General Power of Attorney except that the individual limits the appointed persons actions to do a particular act.

A general power of attorney is not effective if the creator becomes incapacitated or dies.

It can be used the minute the creator completes it.

  
 
USING THE OFFICE SUPPLY STORE FORM OR FORM OFF THE INTERNET  
There are many horror stories regarding this practice. Here are a few traps to avoid:
Inadequate language in the document, or

The document not addressing a specific power necessary to get a financial transaction done

Improperly executed document, or

Not signed properly, or

Using the wrong type of power of attorney.

Whether you use a “form” or go to an elder law attorney is a matter of the client’s comfort level.
A person can buy inexpensive fire insurance for his/her house, but is it going to cover everything and do the job like a premium insurance company would?”

Consider having an elder law attorney draft these documents benefit the client in several ways:
 The elder law attorney will step in to support and advocate for the documents use in appropriate circumstances

The elder law attorney will interview the client and include clauses to cover the client’s circumstances

A document with the elder law attorneys name on the bottom of every page lends an additional level of credibility to the document.

  
 
WHICH ONE SHOULD THE OVER 65 HAVE AND WHY HAVE ONE?  
Regardless of age, everyone should have a durable power of attorney naming a trusted friend or family member to handle financial affairs if he/she becomes incapacitated.

Without a Durable Power of Attorney document, if financial transactions must be managed for an incapacitated person, a court proceeding called a “Guardianship” will be required to appoint a person to handle the incapacitated person’s financial affairs.

Costs to have a guardian appointed can be in excess of $4,000.

A well drafted power of attorney and other court avoiding documents such as a healthcare surrogate designation and Living Will costs, on average around $450 for the documents, if drafted by an elder law attorney.
  
 
SHOULD I OR SHOULDN’T I?  
The most frequently asked question elder law attorneys get is, “Can’t I just use a durable power of attorney form my friend got at the offices supply store?”

The answer is yes…… and No… It really depends on what the client is looking for?

Having a Durable Power of Attorney is similar to fire insurance. If you haven’t bought it by the time you need it, it’s going to cost a lot more for the guardianship.