When most individuals think of estate planning they think of a will or a trust. However, a document that is as important as a will in completing your estate plan is a Power of Attorney.
A Power of Attorney is a written document in which an individual (often referred to as the “Principal”) appoints another individual (the “Agent”) to act on his or her behalf in any number of situations. If the Power of Attorney is a “durable” Power of Attorney, the Agent’s authority to act extends beyond the Principal’s incapacity. This becomes extremely important in situations when a Principal reaches a point of incapacity where he or she is no longer capable of making decisions on his or her own. If there is no Power of Attorney in place, it will be necessary to have the Orphans’ Court appoint a guardian to handle the incapacitated person’s affairs. The procedure for the appointment of a guardian can be time-consuming and much more expensive than having a Power of Attorney in place before incapacity becomes an issue.
A Power of Attorney can include a “springing” provision if you are uncomfortable giving the chosen Agent comprehensive powers while you are still able to make decisions for yourself. A “springing” power in the document states that the powers granted to the Agent do not become effective until you are deemed incapacitated (usually by a licensed physician). Without “springing” powers, your Agent has the authority to act on your behalf upon the execution of the document.
If you would like to discuss Powers of Attorney, or other aspects of your estate plan, please do not hesitate to contact us.
— BBC&B