Appointing someone to take charge of when you can’t
Aging, loss of mental clarity, life events that may temporarily or permanently make you unable to make informed decisions: as much as you would like to think that none of that will ever happen to you, life constantly reminds us that no one is immune to such events. At any given moment you could face health crises that may leave you unable to handle the practical and financial aspects of your life: paying bills, managing your business or investments, or making important decisions involving money.
That’s why it is important, while you are healthy and fully capable and aware, to appoint a person who has your trust to represent you if you should become unable to manage your financial affairs. The Power of Attorney will allow that person to make decisions and act for you as your legal agent or “attorney in fact.”
You are empowering your agent to sign your name and he or she is obligated to be your fiduciary: they must at all times act in your best financial interest and according to your expressed wishes.
- the “Springing Power of Attorney,” which only becomes effective in specific circumstances that you will state in your document, (i.e., in case of an incapacitating event).
This offers only limited power to your agent, who cannot act until he or she provides proof (doctors’ statements and sometimes even court orders) that you are incapable of making decisions for yourself.
- the “Durable Power of Attorney.” This is immediately effective, and there is no need for your agent to prove your incapacity in order to sign in your name.
An estate attorney can help you decide what is the best option for your specific situation. The choice of your agent should be considered carefully and thoroughly – it should be not only a trustworthy individual, but also competent and experienced in financial matters, capable of making clear decisions, economically secure, and willing to take the burden of your affairs.
If you choose a relative or friend as your agent, they may not expect compensation – but if a bank, an attorney or other outside party is named as your agent, you will have to negotiate a payment, either based on hourly fees or calculated on a percentage of your assets.
A guardian will be appointed by the Court in the event that you become incapacitated without having named anyone as your Power of Attorney. Getting the Court involved may result in heavy costs for your family, which would only aggravate their distress in an already difficult situation. Moreover, the Court may choose as agent a person that may not be one you would have chosen.West Palm Beach Estate Planning Attorney Alfred G. Morici has more than 35 years of experience. Call him for a free initial consultation today at 561-471-2551, or contact him online.