A power of attorney, or POA, can be a helpful estate planning tool if used properly.  Understanding what the purpose of a POA is, as well as the limitations, will be important for you and your designated agent.  Following are some POA basics that can help with this discussion with your agent.

POAs are governed by state laws as are many other estate planning issues.  Do not confuse a property POA with a living will, healthcare power of attorney or advanced directive. Although these estate planning tools are similar in nature to a property POA, they are created for the express purpose of giving your agent or healthcare provider the authority to make healthcare decisions for you in the event you cannot do so.

A POA can be designed to terminate upon your incapacity.  If you want your agent to have authority that survives your incapacity, you must create a durable POA.  Most states have very specific guidelines for what creates a durable POA.  A springing POA authorizes your agent to act in your behalf only upon your incapacity.  Specific language will need to be carefully included.  You can grant broad powers to your agent under your POA.  A qualified estate planning attorney can assist you in considering all the variations available to you before executing a POA.

Anderson, Dorn & Rader, Ltd is a member of the American Academy of Estate Planning Attorneys.

Those who have begun to take the process of estate planning seriously will invariably find themselves considering the period of time that will precede the actual trigger event. When you engage the services of an estate planning attorney to handle the legalities surrounding the transfer of your assets after you pass away you may want to consider creating a comprehensive plan that also addresses some of the eventualities that you may face toward the end of your life. As unpleasant as it may be for some people to consider, incapacity is one of these contingencies and if you ignore it you do so at your peril.

To evaluate just how likely it is that you may suffer a period of incapacity when you enter your twilight years you need only look at the statistics. According to studies compiled by the Alzheimer’s Association, as many as one out of every eight Americans who reach the age of 65 suffer from dementia, most often Alzheimer’s Disease. But as you get older, the likelihood of contracting Alzheimer’s increases. Some studies indicate that 40% of those who have reached the age of 85, have Alzheimer’s disease. Alzheimer’s eventually brings dementia along with it, and dementia can inhibit your ability to make sound financial and health care decisions.

This is why it is a good idea to have the appropriate durable powers of attorney in place as a part of your retirement/estate plan. The “durable” power allows the instrument to remain in place should the grantor become incapacitated. Most people will execute both a durable financial power of attorney and a durable medical power of attorney and may name two different attorneys-in-fact, or agents, whose experience or expertise is appropriate for each respective area.

If you don’t have the appropriate powers of attorney in place and you were to become incapacitated, interested parties may have to petition the court to appoint a guardian to act in your behalf and you would become a ward of a person you may not have preferred or even a ward of the state. Providing for this in advance will allow a person to choose their own representatives in advance. This is a vital matter that ought to be part of your planning when you are preparing for the latter stages of your life.

Anderson, Dorn & Rader, Ltd is a member of the American Academy of Estate Planning Attorneys.

A Power of Attorney is a document that allows you to give authority to someone you trust to act on your behalf.

POAs are frequently seen in real estate dealings and brokerage accounts, but they also play a big part in your estate plan.

If you were to become disabled, you’d want to have someone who could speak on your behalf with regard to medical treatments and someone who could take over your financial affairs.

A Healthcare Power of Attorney can handle the medical issues and a Property Power of Attorney can see to it that your finances are in order. But these will only work for you if they’re “durable” – meaning that these documents are not automatically revoked in the event you become mentally disabled.

To make a POA durable, you have to properly state that intention in the document itself. The statutes in Nevada recommend the language that should go into the power of attorney document.

To learn more about Powers of Attorney and planning for disability, contact our office today.

Anderson, Dorn & Rader, Ltd is a member of the American Academy of Estate Planning Attorneys.