When compared the common power of attorney is quite different from the statutory power of attorney and it is provided by the laws as defined by the state. The legislatives acts also make provisions on how the forms are to be accepted and also remission on the part of the accepting party from any resulting liability as a result from accepting it. The fact that the statutory power of attorney can not always be relied upon is a problem.
Ellen and Jeff her husband came to my office looking confused and depressed. Two years ago Jeff had been diagnosed of having Alzheimer’s and he was fifty five years old. At this point it came into question his competency as regards running his business. It was really a very sad situation. Having the disease was bad enough but the fact that Jeff was on the verge of forgetting the names of his beloved children both under the ages of ten really compounded to the issue.
The couple has been my clients for the past eight years. On our first meeting I taught them the difference in a Recoverable Living trust and a will. We had talk about the best choice being living trust and the reason for this is that should they ever become invalid all their assets will be properly managed. The idea of spending money ion trust didn’t interest Jeff now for he believed that wasn’t going to be an invalid soon.
And as a result Jeff went along with the statutory power of attorney forms him and his wife should they ever become disabled and with the will too. I offer counsel that they can not rely on the statutory power of attorney for bigger financial institutions are beginning not to accept it. They understood the risk involved but were still willing to go along with it.
Alas! Here they were in my office because they had refused heed my counsel. The couple had always kept their money separate since they got married, the second marriage for both them. Ellen was denied asses to Jeff’s account and the reason the bank gave was that the account was old and they should open a new one. So the issue here was that if Jeff in the state of his ill health is capable of signing a document.
I informed them that my professional charges would be close to a thousand dollars if I must speak to the bank along with the other places Jeff s investment to honor and accept the document. And the charges would go up to five thousand dollars should we go to court to open an adult guardianship for Jeff. They will lose all the savings associated with will. And Ellen would be required to conduct a probate costing her at about five thousand dollars if Jeff dies.
I am always willing to advice all my clients to think about drafting trust rather than have a statutory power of attorney or a will. Doing this will definitely help you in avoiding the very expensive guardianship proceeding as was the case of Jeff and Ellen.