Issue 7.10
Creating a durable power of attorney can be helpful to your family in the event you become incapacitated. An accident, health crisis, or diseases of age may render you unable to manage your affairs, such as paying bills, managing investments, and making important financial decisions. A “durable” power of attorney allows the person you choose ahead of time to act for you. This person is called your “agent. Your agent has authority to act for you during any time that you are incapacitated.
Making a durable power of attorney gives your agent the authority to act for you but only according to the terms of the power of attorney. Your agent must act in your best financial interest at all times and in accordance with your wishes in accordance with your power of attorney document.
A durable power of attorney can give your agent broad powers over your property. Broad powers are usually necessary to be sure that your agent has the flexibility and power to deal with the many issues that might come up in managing your affairs. Because an agent’s powers are often so comprehensive, some worry that the agent might abuse those powers. If that is a concern, you should consider the use of special power of attorney known as a “springing” durable power of attorney. A springing durable power of attorney restricts your agent from acting on your behalf until you are determined to be incapacitated. At that time, and only at that time, your agent’s authority “springs” into existence. In your springing durable power of attorney, you set the standard for how your incapacity is to be established, such as by the written statement of your physician, by two physicians, or by a trusted family member or advisor, for examples. Describing how your incapacity is to be established avoids costly and public court proceedings to determine your incapacity. An attorney can help you decide which form makes the best sense for your circumstances.
Great care should be taken in choosing your agent. That person should know your general intentions concerning your property, and be financially secure, competent, trustworthy, and willing to take on the burden of your affairs. If you do become incapacitated without having created a durable power of attorney and you have financial affairs that need to be addressed, your family will have to petition the court to determine your incapacity and appoint a conservator to manage your property. Because of that unwanted possibility, most estate plans should include a durable power of attorney.
Sean Sullivan is a shareholder with the firm of Brindley Sullivan, PC, 249 E. Tabernacle, Ste. 102, St. George, UT 84770, (435) 673-9220.