Appointing a trusted family member or friend (referred to as your “agent”) to act on your behalf pursuant to a durable power of attorney is an important part of planning for old age or the possibility of a future health crisis.
If you fail to take this step while you have the capacity and are well and able to manage your own affairs, the results if your physical or mental health declines could include your bills going unpaid due to lack of access to bank accounts, the inability for family to apply for Medicaid or other governmental benefits should you require long term health care and a moratorium on all important decisions you would make for yourself if you could.
The lack of a durable power of attorney may force family or even a health care facility to petition the Court for an Article 81 Guardianship. This is an arduous, expensive procedure involving hearings and accountings on an annual basis, as well as the procurement of a bond by the guardian. All of the significant costs are ultimately borne by the incapacitated person requiring the guardianship, but a loved one may have to advance some of his or her own funds to begin the proceeding. This is an avoidable process if a power of attorney is in place.
The price of a comprehensive power of attorney that includes a rider to allow for gifts to family cannot compare to the far greater expense of a guardianship. Aside from being far less costly, the process of procuring a comprehensive power of attorney with gifts rider involves a conversation with your Estate Planning attorney followed by an appointment to sign your documents and maybe ask a few questions or listen to a relatively brief explanation of how powers of attorney work. A guardianship can feel like a second job.
Finally, while the power of attorney has the potential to help avoid probate if used to put one’s affairs in order, it should be noted that it may only be used during the lifetime of the grantor or “principal”.
If you have not given a friend or family member the ability to make decisions when you can’t, call Mark H. Weiss at 631-462-5577 for more information.