2008-10-24 / Columnists

Spo tlight On Elderlaw

Power of Attorney: Perhaps THE Most Important Estate Planning Document
Commentary By Nancy J. Brady, RN, Esq. And Linda Faith Marshak, Esq.

Power of Attorney is a form in which a competent individual (known as the "principal") can select agents, or representatives to act in various types of personal, financial and business transactions. The Power of Attorney is in effect only during one's lifetime. In most instances people select their spouse, children, or other close family member or trusted friend to act as their agent. When selecting an agent, the most important traits are honesty and trustworthiness, because the Power of Attorney provides the selected agent with full authority to act for the principal.

A "durable" power of attorney is the type of document we most frequently recommend for our clients. The durable power of attorney goes into effect immediately upon execution or signing by the principal, and stays in effect, even if the principal becomes incompetent or incapacitated.

One of the major advantages of having a validly executed Power of Attorney in place is the avoidance of the delays and expense of the appointment of a guardian. For example, in our practice we have many clients who require nursing home placement. Without a validly executed Power of Attorney in place, if that individual is incompetent, the family members have to apply for guardianship in order to complete the asset transfers necessary for eligibility to apply for government benefits to pay for care.

The power of attorney does not allow the agent (in New York State) to make medical decisions for the principal. In order to make sure someone is appointed to make medical decisions in the event an individual cannot speak for himself, a Health Care Proxy should be in place.

Many clients come to our office with documents completed by other attorneys, and, in many instances have not completed Power of Attorney forms. In our office, the Power of Attorney and Health Care Proxy in addition to the Last Will and Testament are all part of a basic estate planning package. As a matter of fact, we do two forms of Power of Attorney documents - the New York State statutory form - which banks are required by law to accept; as well as a more extensive form Power of Attorney which expands on the statutory powers and provisions.

Be careful - you should have your power of attorney forms completed, executed and notarized by an attorney. Too often we see "do it yourself" powers which are incomplete, or not correctly completed, and in some instances the principal does not have the capacity to execute new forms. The legal fees incurred for basic estate planning documents can avoid expensive guardianship proceedings, nursing home costs (because asset transfers cannot be completed in a timely manner).

Additionally, Power of Attorney forms should be reviewed periodically - to make sure the agents are still available to act, and that the form includes all the powers and provisions that are available under the law.

In case you haven't heard - our offices have been relocated - we are now located at 156-36 Cross Bay Boulevard, Howard Beach, New York, and 129-04 Newport Avenue, Belle Harbor, New York. We can still be reached at 718-945-7777, or 718-738- 8500.

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