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Durable Power of Attorney

Who Should Be My Agent?

     You may wish to choose a family member to act on your behalf. Many people name their spouses or one or more children. In naming more than one person to act as agent at the same time, be alert to the possibility that all may not be available to act when needed, or they may not agree. The designation of co-agents should indicate whether you wish to have the majority act in the absence of full availability and agreement. You should name a successor agent to address the possibility that the person you name as agent may be unavailable or unable to act when the time comes.

     There are no special qualifications necessary for someone to act as an attorney-in-fact except that the person must not be a minor or otherwise incapacitated. The best choice is someone you trust.

How Does the Power of Attorney Sign my Documents?

Assume Mr. John Johnson appoints his wife, Jane Johnson, as his agent in a written power of attorney. Jane, as agent, must sign as follows:
     “John Johnson, by Jane Johnson under POA” or
     “Jane Johnson, attorney-in-fact for John Johnson.”

Does My Power of Attorney only Sign my Checks?

     In addition to managing your day-to-day financial affairs, your attorney-in-fact can take steps to implement your estate plan. Although an agent cannot revise your will on your behalf, some jurisdictions permit an attorney-in-fact to create or amend trusts for you during your lifetime, or to transfer your assets to trusts you created. It is prudent to include in the power of attorney a clear statement of whether you wish your agent to have these powers.

     Gifts are an important tool for many estate plans, and your attorney-in-fact can make gifts on your behalf, subject to guidelines that you set forth in your power of attorney. For example, you may wish to permit your attorney-in-fact to make "annual exclusion" gifts (currently up to $11,000 in value per recipient per year) on your behalf to your children and grandchildren. It is important that the lawyer who prepares your power of attorney draft the document in a way that does not expose your attorney-in-fact to unintended estate tax consequences. While some states permit attorneys-in-fact to make gifts as a matter of statute, others require explicit authorization in the power of attorney.

The Durable Power of Attorney (Financial)

     An important part of estate planning is the power of attorney. Valid in all states, these documents give one or more persons the power to act on your behalf. The power may be limited to a particular activity (e.g., paying your bills) or general, empowering one or more persons to act on your behalf in almost any financial situation. It may take effective immediately or only upon the occurrence of a future event (e.g., a medical determination that you are unable to act for yourself). The latter are "springing" powers of attorney. It may give temporary or continuous, permanent authority to act on your behalf. A power of attorney may be revoked, but most states require written notice of revocation to the person named to act for you.

     The person named in a durable power of attorney to act on your behalf is commonly referred to as your "agent" or "attorney-in-fact." With a valid power of attorney, your agent can take any action permitted in the document. Often your agent must present the actual document to invoke the power. For example, if another person is acting on your behalf to sell a home, the title company will usually require that the power of attorney be presented before your attorney-in-fact's authority to sign the title will be honored. The same applies to sale of securities or opening and closing bank accounts. However, your agent generally should not need to present the power of attorney when signing checks for you.

     Without a Durable Power of attorney, should a situation arise where you become incompetent or are unable to make financial decisions, yor family will have to apply to the Court to become your financial guardian. The guardianship process can be both a length and expensive process.

     When setting up your durable power of attorney or planning your estate, contact an experienced estate planning attorney at Brabazon Law Office. We offer a no-fee initial consultation and will be happy to answer your estate planning questions.

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Brabazon Law Office, LLC P.O. Box 11213 Green Bay, WI 54307-1213 Phone: (920) 494-1106 Fax: (920) 494-0501 E-Mail: brabazonlaw@msn.com

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