Do You Need a Power of Attorney? We Can Help.

Without a signed and well written Power of Attorney, neither your spouse, child, family or friends can protect you or make medical, personal and legal decisions for you if you get hurt or become incapacitated. You absolutely need a Power of Attorney…NOW! Otherwise, your family has to go to Court and spend thousands of dollars to become your Power of Attorney.

The Value Of A Durable Power Of Attorney

The Durable Power of Attorney is an excellent planning device for most people. It is particularly useful for individuals who are concerned about physical or mental conditions.

In the discussion that follows, the major highlights and benefits of the Durable Power of Attorney (DPA) are briefly explained. The discussion is not intended to be exhaustive, and legal counseling is necessary for persons interested in signing such a document.

What is a "Power of Attorney"?

A Power of Attorney is a document in which you give another person, the "attorney in fact," the legal authority to act on your behalf. This authority can be limited to a particular asset, a particular transaction, or a particular period of time. It can also be general, such that it conveys broad authority to act on your behalf.

How is a "Durable" Power of Attorney Different?

A regular Power of Attorney is valid only so long as the person signing the document has the capacity to understand its significance and meaning.

The "Durable" Power of Attorney can be of two (2) types, either of which ensures its validity even if the person has become incapacitated.

1. Effective immediately. This type is effective when signed and remains effective even if the person becomes completely incapacitated.

2. Effective upon incapacity. This type becomes effective when and if the person becomes incapacitated.

What Powers can be Given in a Durable Power of Attorney?

The power to handle all of a person's assets can be conveyed in this document if it contains necessary language. This includes the power to invest and sell assets, to enter into contracts, to collect and recover assets, to make gifts and deal with all types of insurance, to operate or sell a business, to transact banking, file documents with the State of New Jersey or other governmental agency on your behalf, including the IRS, and to handle other tax and trust issues.

Alternately, the document can select special areas of authority and delete others.

What are the Benefits of a Durable Power of Attorney (DPA)?

In many instances, a DPA can avoid the need for a conservatorship or guardianship of the estate. A conservatorship or guardianship involves a court hearing in which one person - the "conservatee" or the “incapacitated person” - is found to be unable to handle his or her own affairs, and another person - the "conservator" or “guardian”- is appointed to handle their affairs. A conservatorship or guardianship can be an expensive process (in excess of $5,500), and ongoing court supervision is required.

A properly drafted DPA satisfies the need for "surrogate management" by having such a person appointed while the giver of authority still has capacity. No court proceeding is required. It is a very important document to have.

Should "Form" Durable Powers of Attorney Be Used?

Generally no. Forms are available but are rarely adequate. If they are to be used, they should be used only after advice from an attorney who has a sophisticated understanding of their uses and limitations. There are a number of reasons for this warning.

1. These documents convey an enormous amount of authority. An "attorney in fact" or agent typically has virtually complete control over a person's assets. It is frequently necessary to go beyond the forms to build in protections for the signing person.

2. Special needs, concerns, and limitations often necessitate the drafting of a personalized document.

3. Some forms require the person to choose from various options that are included in the document, but do not explain the existence or implications of such choices.

Let an experienced estate and probate attorney who understands elder law issues assist you. The Durable Power of Attorney, if properly drafted, is one of the least expensive forms of insurance a person can buy. Even more important than the documents that discuss how we want things distributed upon death, the Durable Power of Attorney specifies how we want things done while we are still alive, but unable to manage our affairs. Anyone who is age eighteen (18) or over can, and probably should, sign such a document.

Call our managing partner, Fredrick P. Niemann, at 732-863-9900 or e-mail him at fniemann@hnlawfirm.com to discuss your needs and/or to set up an appointment.