Tuesday, November 19, 2013
Estate Planning Attorney Tools: Durable Powers of Attorney
Estate planning documents plan for one’s death. It is unpleasant to think about, but everyone passes away, so an estate plan should be implemented no matter what.
There are some cases when an estate plan is taken into consideration when the estate owner has not yet passed away. For example when a person is incapacitated and not capable of controlling their estate. In such cases one must have somebody to make critical decisions for them. As an experienced estate planning attorney from Orange County, CA, I advise my clients to execute a durable power of attorney. This legal mechanism enables the estate owner to appoint a trusted person to act on his behalf when he is incapacitated. The representative who is known as the “agent” or “attorney in fact” will be authorized by the estate owner to pay his bills, file taxes, make bank and investment transactions, and collect money from those who have payables with the estate owner. In other words, even if the estate owner were comatose or otherwise incapacitated, his day-to-day business would still get done with help from his or her authorized “agent.”
An estate owner has the option to execute a durable power of attorney to be “immediate” or “springing.” In an “immediate” power of attorney, the mechanism takes effect immediately even if the estate owner is not yet incapacitated. On the other hand, a “springing” durable power of attorney takes effect only when the estate owner becomes incapacitated as certified by a licensed medical practitioner. (The term is derived from the fact that the power “springs” into being only when the contingency takes place.)
For the estate owner instructions regarding health may need to be given to a Durable Power of Attorney. The mechanism for this situation will authorize the appointed agent to make health care decisions on a person’s behalf. The agent is authorized to make decisions on whether to “pull the plug” if the principal is pronounced brain dead, or what treatment regimens are to be administered to the principal.
A Durable Power of Attorney is coterminous with the principal. Hence, he must consult with his estate planning lawyer in executing other estate planning documents such as the Will and Living Trust.
Besides giving the principal peace of mind in the event of his incapacity, a well-executed durable power of attorney can help prevent a conservatorship. This is a judicial procedure that takes place when the estate owner is incapacitated and no one has been appointed to act on his behalf. A conservatorship, just like probate, is a public and costly procedure. As a contingent action, the principal can still appoint a conservator so that he can still be in control of affairs in case a court still deems a conservatorship necessary.
In my years as an estate panning attorney from Orange County, CA, I have seen several cases of incapacitation. However, having no durable power of attorney, they were not able to appoint someone to act on their behalf during that critical period. It is not sufficient to prepare for the eventuality of death. You also have to plan for the possibility of incapacitiation as well.
Labels: durable power of attorney, estate planning attorney orange county ca, estate planning lawyer, estate planning lawyer orange county, estate plans
I help people protect their families through affordable, personalized estate planning. Tompkins-Law.com I am in solo practice in Orange County, California where I focus on estate planning, family trusts, living trusts, wills, corporations and business succession planning. I speak Spanish and serve the latino community. Fideicomisos-Testamentos.com