Durable Power of Attorney
A "Durable Power of Attorney" is one of the most important planning tools that an attorney can recommend to a client, not only for estate planning, but also for Medicaid and other entitlement programs.
When a person (the principal) signs a power of attorney, that principal gives another person (the agent, or attorney-in-fact) the power to manage the principal's assets and affairs. The agent's powers may be defined broadly so as to authorize almost any act that the principal might have performed (a "general" power of attorney. However, generally the agent would not be allowed to make or revoke a will.
A power of attorney can be either a "general" power of attorney, which allows the agent to perform almost any act the principal might have performed himself for the financial management of his affairs, or a "limited" power of attorney. A limited power of attorney gives the agent one or more specific powers, such as the power to sell a particular property to a particular purchaser at a particular time.
The principal may name one or more agents, who can be authorized to act either "jointly" (requiring everyone's signature) or "severally" (alone without the signature of the other agent or agents).
The "durable" power of attorney states that the powers granted to the agent will not be affected by the subsequent disability or incapacity of the principal.
The power of attorney allows financial matters and asset management for a seriously ill or disabled person. It is especially useful where the person's assets may be modest and, accordingly, do not warrant the expense associated establishing a living or irrevocable trust.
Because the durable power-of-attorney remains effective after the principal's incapacity, a guardianship may not be required. The agent can continue to act after the principal's incapacity, to manage his assets or to take various measures. Unless a dispute arises, or the power of attorney proves inadequate, there will not be any need for costly and time-consuming guardianship proceedings to manage the principal's finances.
In New York State, a health care power of attorney or proxy must be a separate document from a power of attorney. In a some other states, the principal is allowed to grant health care powers to the agent in the durable power of attorney.
This site does not provide legal advice. You should consult a lawyer.