Incapacity Planning: Durable Power of Attorney
Estate planning is the managing and passing of your assets through the
preparation of documents and re-titling of assets. The process of linking
asset protection with estate planning is called integrated estate planning
and they work together to form a comprehensive plan. Having one without
the other is incomplete. Every person should have an estate plan so that
they can control who gets their assets at death. In addition, the estate
plan covers an individual should he or she become incapacitated.
The durable power of attorney is a legal document that names a person,
also known as an agent, to handle financial matters for you. “Durable”
means that the document withstands incapacity. Some states allow you to
have a “springing durable power of attorney,” which springs
into effect only in the event that a physician signs off on your incapacity;
however, Florida recently changed its law and does not allow springing
powers for powers of attorney unless it is for medical purposes.
The net effect of a durable power of attorney is that you have to be very
careful whom you choose as your agent because that person’s power
is effective immediately upon your signing the document. With that in
mind, a good Florida attorney will show you how to avoid the potential
for abuse. It is important to have this document in effect as it may assist
you to avoid the need for a guardianship in the event of your incapacity
since the document will remain in effect despite your incapacity.
The durable power of attorney is used for financial and business matters.
For instance, an agent would have the power to open and close bank accounts
for you as well as buy stock. The agent acts in the capacity of a fiduciary,
which means that person is in a trusted position and must act prudently
on your behalf. This power of attorney can also be used to sign business
papers and enter into contracts in the name of the principal, or the person
creating the durable power of attorney.
It is important to note that this power cannot be delegated. For example,
if you delegate the power to your father and he remarries, your father
cannot “delegate” this power to his new wife or anyone else.
An agent can’t give someone else the power to be another person’s
agent, only you can.
Please visit my website or contact me directly if you would like any more
information regarding asset protection or estate planning, or would like
a copy of my best-selling books on asset protection (complimentary if
you mention this blog).
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