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Non-Durable Power of Attorney: Temporary Delegation of Authority

Power of Attorney

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How Can a Non-Durable Power of Attorney Allow You to Temporarily Delegate Authority to Another Party?

You may diligently handle your finances on your own or enlist the assistance of a financial planner to help you make the best possible decisions with your assets. But sometimes, you may need more help to complete certain financial transactions. For example, imagine if you required an agent in another location to sign a legal document for you or if you needed to authorize someone to pay your bills at home while you were traveling in another country.

A helpful lawyer from Davidov Law Group can explain how drafting a non-durable power of attorney could prove useful if you find yourself in a situation where you need to transfer the ability to handle some or all aspects of your finances to another party. A New York powers of attorney lawyer can also outline the limitations and state requirements for these powerful documents to ensure you are utilizing them safely for your maximum benefit. Don’t hesitate to contact our firm today for more information and guidance.

What Does a Power of Attorney Do?

A power of attorney (POA) is a legal document that allows a designated person or persons to act on your behalf in financial and property matters. To be legal, the POA must meet the standards outlined in New York state law. Additionally, if you wish your POA to remain valid for an extended time, you should perform regular checks and updates with the assistance of a skilled attorney. Frequent maintenance ensures that your POA is current with all applicable laws and the agent you have designated is still capable of taking on the significant responsibility of the position.

One key point to note is that a New York POA does not grant the agent the ability to make health care or medical decisions for you. To ensure your medical care is properly handled when you cannot make your wishes known, your estate plan should contain a health care proxy. An estate planning lawyer can help you determine which documents are required to meet your needs.

What is the Difference Between a Durable and Non-Durable Power of Attorney?

Both varieties of POA may grant your agent sweeping powers to take care of all your financial issues or can be tailored to handle a specific circumstance. The main difference between the two types of POAs lies in when the powers are revoked. By understanding the options available to you, you can make an informed decision on which POA is best suited to your goals.

Non-Durable Power of Attorney

A non-durable POA is usually drafted to serve a specific, time-limited purpose. The powers granted by the POA remain until the principal (the creator of the POA) revokes them or the transaction(s) defined by the POA are completed. However, this type of POA also immediately ceases if the principal dies or becomes incapacitated for any reason.

Durable Power of Attorney

The terms of a durable POA are still legally valid if you lose your capacity to make decisions on your own due to injury, illness, or advanced age. You can use a durable POA to ensure that a trusted person manages your finances if you become unable to do so. Your agent can pay bills, make gifts, and contend with business affairs and other financial transactions on your behalf.

By creating a durable POA, you prevent your loved ones from having to go to surrogate’s court to get a Guardian of Property assigned to oversee these tasks during your incapacitation. However, a durable POA does expire upon the principal’s death.

What is a Springing Power of Attorney?

A springing power of attorney can be durable or non-durable, depending on how it is structured. This type of POA is designed to “spring” into effect when a predetermined situation arises. For example, you could draft a durable POA to become effective only after you are declared incapacitated by a doctor. A springing POA can prevent your agent from accessing your finances until their assistance is needed, limiting the potential for fraud or misuse of power. It is crucial to enlist the help of an experienced attorney to draft a springing POA because they can be complex, and any errors can result in the document not performing as you wish at a critical time.

When May a Non-Durable Power of Attorney Be Appropriate?

Since a non-durable POA ceases if you become incapacitated or pass away, it is not useful as an estate planning tool. However, a non-durable POA can play a role in your general financial plan or be appropriate for certain short-term circumstances where you wish to allow an agent to act on your behalf in a financial transaction.

Situations where you may choose to draft a non-durable POA include, but are not limited to:

  • Allowing an investment broker to make financial decisions for you regarding the purchase or sale of stocks.
  • Appointing an individual to handle your finances while you are out of the country for military duty, business, or long-term vacation.
  • Giving a trusted person the legal power to sign official documents if you cannot be physically present.

How Can an Experienced Lawyer Help You?

While it is possible to draft a non-durable power of attorney on your own, you may be opening yourself to substantial financial risks. The document must be precisely worded to ensure the agent’s powers are strictly limited to the circumstances where you require their assistance. Otherwise, their powers may not terminate when you want them to, and the agent may be able to take further actions you did not approve, such as spending your money, selling or mortgaging your property, or making important decisions regarding your business.

Davidov Law Group can help you evaluate your needs and explore which powers of attorney are suitable for your circumstances. We will ensure your documents are carefully drafted to meet state laws and protect your interests. Contact our law firm today at 516-253-1366 to schedule a free case evaluation and learn how we can serve you.

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Incapacity planning is something that everyone should take the time to include in his or her estate plan.  If you want to be able to have a choice in your future medical decisions, you need to incorporate incapacity planning into your overall estate plan.

Take a look at some of the information below to learn more about the importance of this planning.  If you have additional questions, or if you’d like to start your planning, meet with an estate planning attorney.

  • You should take the time to create a living will.  This estate planning document will allow you to spell out your medical wishes ahead of time.  Many individuals use this document as a way to outline their wishes regarding the use of life support.
  • It’s also important to include a healthcare proxy in your estate plan.  This estate planning document is used to appoint a healthcare agent who will be responsible for helping to make important decisions if you ever become incapacitated.

Your agent will help to make sure that your medical wishes are followed while ensuring that you’re receiving proper care.  He or she will also be responsible for making important decisions regarding your health.  If you want to have control over who will help to make these important decisions, you need to create a healthcare proxy.

  • Include a HIPAA release so that your health care agent (under your health care power of attorney) has full access to your medical records and medical professionals such as doctors.

Now is the time to create an incapacity plan.  Without a plan in place, you will have no control over your medical future.  If you have additional questions about incapacity planning or if you’d like to start your plan, consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

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Many people think incapacity planning is not for them, assuming only those who are approaching retirement age can benefit. The reality is, accidents can occur at any time and leave us mentally incapacitated. A car accident, for example, can leave victims in a coma while medical conditions such as Alzheimer’s disease can slowly take away a person’s mental capacity. By establishing a detailed incapacity plan, you will be able to select a representative to act on your behalf in the event that you are unable to manage your affairs.

Creating a Power of Attorney

A durable power of attorney is a legal document which designates a specific person to act on your behalf if you become incapacitated. This person, known as the “attorney-in-fact” or “agent”, will be responsible for making financial decisions, such as managing your debts and investments, as well as overseeing your medical treatments. While you are mentally competent, you have the power to dictate how you wish your agent to act if you are ever incapacitated.

A “durable” power of attorney refers to the fact that the legal document will not expire if you are mentally unable to manage your affairs. In contrast, a “nondurable” power of attorney is no longer valid should you (the principle) become mentally incapacitated. Despite its name, your attorney-in-fact does not have to be a legal professional, in fact agents rarely are. They must, however, be someone you can trust and will not abuse or neglect their responsibilities.

One person may not always be the best choice to handle both the medical and financial decisions. Separate documents are often drafted for the medical and financial powers of attorney and you are able to distribute responsibilities between different people as you see fit. In the event that you choose a single person to act on your behalf, it is a good idea to designate an alternative candidate. This way, if something should happen to the attorney-in-fact, you will still have a representative to carry out your wishes. By making these choices and preparing early, the agents you choose to act on your behalf will have time to understand and prepare for their responsibilities.

Avoiding Conservatorships

In the event of an accident, if no valid attorney-in-fact has been established, the state may designate a conservator to handle your affairs. This can leave a family member to administer your estate, leaving them with a responsibility that they will likely be unprepared for. It can also lead to a dispute in cases where there is no clear indication of what the incapacitated party would have wanted.

Conservatorships also have additional legal necessities such as court hearings. While these processes are in place in order to help safeguard the mismanagement of an estate, it can be a costly process and burden your loved ones with unnecessary legal fees. The best way to avoid a conservatorship is to have a well drafted incapacitation plan in place.

Secure a Compassionate Estate Planning Attorney

If you have questions regarding the estate planning process or want to create an incapacity plan, our Nassau County estate planning attorney at the Davidov Law Group can help. Our firm can provide legal guidance to help ensure that your incapacity plan meets all legal requirements and that your wishes will be carried out as you intend.

Call (516)-928-6594 to request a personal consultation and talk to a lawyer about planning for the future.

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Sometimes people who don’t have an extraordinary amount of wealth assume they don’t need to discuss estate planning with an attorney. They are aware of the fact that the estate tax is only applicable to large estates, and they think that only those who are subject to the estate tax should plan ahead.

There are a number of reasons why this is patently untrue, but the one that we would like to take a look at here is the need to plan ahead for possible incapacity.

You undoubtedly understand the fact that some people do become incapacitated. But you may be willing to gamble because you think that it is statistically unlikely that this will happen to you. If this is your stance you should know a few things about Alzheimer’s disease.

This disease strikes at an alarming rate. According to statistics provided by the Alzheimer’s Association about 13% of people who attain senior citizen status (i.e. those who are at least 65) have contracted Alzheimer’s disease.

This percentage may seem relatively small, but if you take it a step further you find that 45% of people who are at least 85 are Alzheimer’s sufferers.

People are living longer and longer lives, and it is quite possible that you will indeed live into your mid-eighties and perhaps beyond.

For the above reasons incapacity planning is a must. This will typically include the creation of a health care proxy and a durable power of attorney empowering decision-makers of your own choosing to handle your affairs in the event of your incapacitation.

If you are currently unprepared for the possibility of incapacity you would do well to execute these important documents with the assistance of a licensed estate planning attorney sooner rather than later.

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The process of estate planning should ideally be a broad and comprehensive one. Recording your wishes regarding the distribution of your assets is only part of what you should take into consideration. You should also address the postmortem aspect.

On the other side of the coin, you should address the period of time that would logically precede your death. This can include the execution of a power of attorney to appoint someone to act on your behalf in the event of your incapacitation.

Power of Attorney Kew Gardens NY

Different Types Of Powers Of Attorney

There are different types of powers of attorney. These legal devices are used in all different areas of the law. One type of power of attorney is a general power of attorney.

With a general power of attorney you are giving the agent or attorney-in-fact that you choose the power to act in a sweeping, comprehensive manner. There are no particular limitations. The agent could do anything that you can do for yourself.

Another type of power of attorney is a limited power of attorney. With this type of power of attorney you give someone the ability to act on your behalf under limited circumstances.

For example, let’s say that you own a real estate investment company. You could empower your assistant to sign certain types of business documents on your behalf. His or her ability to act on your behalf would be limited by the precise terms of the document.

Durable Power Of Attorney

Whether it is limited or general, a standard power of attorney that is not designated as durable would no longer be in effect if the grantor was to become incapacitated. If you want to appoint someone to act on your behalf in the event of your incapacity, you should execute a durable power of attorney.

If you don’t execute a durable power of attorney naming your own hand-picked decision-maker, a guardian could be appointed by the state to act on your behalf if you become incapacitated.

A guardianship proceeding can be lengthy, and the need for immediate decision-making may exist. In addition, the guardian that is chosen by the court may not be someone that you would have chosen. And, members of your family may not agree with regard to the optimal course of action. They could clash in court, delaying things even further as hard feelings start to develop.

You can prevent all of these negative consequences if you take the time to execute a durable power of attorney naming your own hand-picked decision-maker. Hopefully you will never become incapacitated, but if you do find it difficult to handle your own affairs late in your life you will have an effective plan in place.

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Getting a General Durable Power of Attorney is one of the most important things that you can do as part of your overall estate plan. You should consider the possibility that you might be incapacitated and unable to look after your own interests in the latter years of your life. If you do not plan ahead, then someone else will have to go to court and ask for guardianship over you to protect your interests.

If you think that having a relative asking a court for guardianship is not that big of deal, a recent case illustrates the problem with that approach. Sometimes, your relatives might not agree about all aspects of the guardianship and who should be the guardian. Usually, that argument is left in court, which can be bad enough. In the case of the Fox family, the disagreement resulted in a 63 year old high school counselor punching his 74 year old uncle after a court hearing.

Fortunately, not every family feud over guardianship will end up in criminal charges. However, any family disagreement over the issue is unnecessary and avoidable. All that you need to do is have an attorney prepare a General Durable Power of Attorney so that everyone knows who you want to look after your interests when you are no longer able to do so.

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A durable power of attorney allows an attorney-in-fact or an agent to make specific financial decisions on the principal’s behalf. A power of attorney document must be in writing and must comply with specific statutory formalities. Additionally, some banks may require parties to use their specific forms before they honor their power of attorney instruments. In most cases, you will have to sign your power of attorney document in the presence of a notary public and obtain the notary’s signature or seal. You may also need to sign your document in front of witnesses. You can limit your agent’s financial decision-making powers by specifying the types of actions your agent can take on your behalf. You can also further specify what types of financial decisions your agent cannot make.

Every power of attorney ends at the principal’s death. This means that if you die, your power of attorney is no longer effective, regardless of whether or not you revoked it or validly destroyed it. The termination is automatic. However, your power of attorney may also become automatically invalid if you become mentally incompetent. Unless you created a “durable” power of attorney, your power of attorney most likely ends at your mental incapacity. Although state laws may differ, most states require you to include certain words to express your intent in creating a durable power of attorney. You may need to include specific words, such as “to remain effective upon my mental incapacity” or “a durable power of attorney.”

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If you’re like most people, you may not be familiar with the concept of incapacity planning. Incapacity planning is simply preparing for the time that you may be unable or unwilling to make your own day to day decisions. Estate planning encompasses incapacity planning.

When would I be incapacitated?

Incapacity refers to the time when you would be unable to manage your finances, medical decisions, and day to day affairs.

Who determines that I am incapacitated?

A court can make the competency decision during a guardianship proceeding. But, guardianships are expensive, time consuming, public, and stressful. This process, called “guardianship” or “conservatorship,” is required if you do not have appropriate incapacity planning in place.

It is preferable to have a private determination such as by a “disability panel.” You give instruction for the creation and implementation of such panel in your revocable living trust. The panel typically includes trusted family members and medical professionals.

So, I need a revocable living trust to prepare for incapacity?

In almost all cases, it would be beneficial to have disability provisions in a revocable living trust, financial power of attorney, and health care proxy. This is the three prong approach to incapacity planning.

In the revocable living trust, you provide for the determination of your disability, name disability trustees, and give instruction for your care and the management of your assets during any period of disability.

I need a power of attorney and health care proxy?

You need a financial power of attorney so your named agent can manage your assets and financial affairs and take care of your day to day business. The agent under a financial power of attorney should care about you, be highly organized, a good record keeper, and a good communicator.

You need a health care proxy so that your named agent can make health care decisions for you if you are not able to make those decisions yourself. The agent under a heath care proxy should care about you and have the ability to be assertive with medical professionals, especially doctors.

If you have any questions about incapacity planning, consult with a qualified estate planning attorney.

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The power of attorney is a powerful document; likely the most powerful legal document that you’ll ever sign. However, it is not an all powerful magic wand. The power of attorney has limits.

Not a Magic Wand

The power of attorney is not a magic wand because it’s not always honored, especially if it’s older or the signature looks scribbled. It is common place for a power of attorney to be refused because of its age as institutions are afraid of honoring a revoked, forged, or fraudulent document. Thus, it is extremely important to keep your estate plan up to date.

It is also common for a financial institution to refuse to honor a power of attorney because it’s not their form. Such institutions don’t want to analyze the legality and validity of each power of attorney for each client. They want you to use their forms.

Belt and Suspenders

Disability provisions in a revocable living trust and a power of attorney work well together. Trusts and trustees are never refused. However, a trustee may only manage assets that are titled into the name of the trust. If an asset is not funded, the agent under the power of attorney must manage that asset.

It is prudent to have a “funding power of attorney” so that your agent has the authority to transfer your assets into your trust on your behalf. However, there are some assets such as retirement accounts and cars (in some states), that cannot be transferred into the trust, so the power of attorney agent must act.

Successors

It is common for the trustee of your trust and your agent under your power of attorney to be the same person. Be sure to name successor trustees and agents in the event that your named trusted helper is unable or unwilling to serve.

If you have questions about powers of attorney or disability planning with a revocable living trust, consult with a qualified estate planning attorney.