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.
If you have been following this article, you would have picked up on the fact that there are different powers of attorney. Therefore, you will need to make the right choice of the one that will help you secure your financial and health situation. You should also know that the power of attorney gives someone else the power to ask in your place and oversee your business when you are not in a position to do so. When you know that you are having someone else handle your affairs, you will then realize the importance of having the right option in terms of the power of attorney form. Here are a few tips to help you in getting the right one out of your plentiful options:
1. Make sure you know the one you are looking for. There are many kinds of powers or attorney these days, and you need to be sure you have selected the right one to represent your needs. When you are selecting, take into consideration the types and the processes that go into their legalization. In groups there are such types as durable, the nondurable and the springing types. In legalizing them, there could be witnesses involved or alternatively no witnesses may be present. The power of attorney could be verbal or nonverbal also.
2. The non-durable type is a form of power of attorney that comes into effect the instant it is signed but works only for a short duration until its purpose is accomplished. For instance, the principal might want the agent to sell an apartment for him or her and the confer the power of attorney to the attorney in fact – agent and attorney in fact are one and the same thing, by the way – and after the deal is done, power reverts to the principal. This method is ideal when the principal is still having a grip on his establishment and simple wants the agent to assist him in a small matter.
3. Durable power of attorney on the other hand is used when the [power of attorney is usually complete and might last for a long time or is unpredictable as to duration. This means that the principal is probably suffered at terminal illness or is mentally incapacitated and cannot oversee the helm of affairs. What is then done is that the power of attorney is then handed over to a close friend or relative to the principal.
4. The springing power of attorney is by far the most acceptable. This only comes into effect when you have been certified incapable of making further business judgment based on their findings on your state of mental or physical health. Once such a bill of health is passed, the power of attorney ‘springs’ into action and confers authority to the attorney in fact.
Here’s a point you should consider if you are being conferred the power of attorney. Ensure that you have witnesses present if you are in doubt of the mental state of the principal. The principal, depending on his state of mental health might utter unintelligible things and they will need to be clarified with the help of the witnesses present.