Got Durable Power of Attorney? (If not, you should)
A Durable Power-of-Attorney (DPOA) is a legal document that allows someone you chose (called an agent or attorney-in-fact) to handle your financial and personal affairs. The “durable” in durable power of attorney is critical because it means that your agent can continue to act on your behalf even if you become incapacitated. Many people fail to realize the importance of a DPOA until after incapacity strikes. Spouses do not automatically have power of authority over each other. Without a valid DPOA, someone (usually someone in your family) would most likely have to resort to filing a guardianship – a formal legal action- to obtain an order form a judge declaring you incapacitated and appointing a guardian to handle your affairs. Guardianships are time-consuming, expensive and burdensome, and should be avoided, if possible.
Just as important as having a DPOA is having one that is valid under state law and meets your needs. Too often we see people who have Do-It-Yourself DPOAs that are not executed as required under Florida Law. We also see DPOAs where the only listed agent is someone no longer alive or is incapacitated. These DPOAs are not valid and the person with them has nothing more than a false sense of security. A DPOA should cover the issues that could potentially affect you. Especially for older individuals, the DPOA should expressly cover areas such as long term care planning, including issues related to Medicaid, Medicare, SSI, and other needs-based governmental programs.
A well-crafted DPOA is important because your agent will only be able to do those things the DPOA states he or she can do. Need to create an irrevocable trust but the DPOA is completely silent on trusts? Your agent cannot create one and the only option is to seek that expensive, time-consuming and burdensome guardianship again.
You may be thinking, “Well, I’ve got my accounts and assets in joint names, so I don’t need a durable power of attorney.” Holding property jointly, such as a joint bank account, is a common and simple way to enable someone else to have automatic access to your property. However, joint ownership is not helpful in handling property matters that may require
your signature—such as transferring a house, car, or investments. Joint ownership does not protect you nearly as well as a durable power of attorney.
A durable power of attorney provides a simple way to appoint someone whom you want to manage any part or all of your affairs: financial, personal, or both. You can include instructions, guidelines, or limitations as you wish. Since it terminates upon your death, it should be one of the tools in your overall estate plan. Make no mistake, in the long run, a properly drafted durable power of attorney saves time, money, and stress.
Gibbons | Neuman has been helping the Tampa Bay community with estate planning for decades. We can assist you with your estate planning needs, including creating for you a durable power of attorney. Give us a call.