In estate planning, a durable power of attorney is often chosen as a way to plan for those times when you are incapacitated. It is a written document that remains valid even if you should later become unable to make your own decisions. With a durable power of attorney, you are able to appoint an agent to manage your financial affairs, make health care decisions, or conduct other business for you during your incapacitation. A durable power of attorney may be general or limited. A general durable power of attorney may allow your agent to do every act which may legally be done by you. A limited durable power of attorney cover specific events, like selling property, making investments, or making health care decisions.
The Vulnerable Agent
Some estate planners have their clients execute durable powers of attorney for property management as a routine part of the estate planning “package,”’whether their clients ask for them or not. In the Law Office of Noel Lawrence, they’ve seen seen a number of durable power holders facing serious liability exposure. A typical fact pattern emerges in which an elderly person, as part of his or her estate plan, gives a power of attorney for property to a trusted confidante, such as one of the principal’s children or a close friend, or a housekeeper. The power of attorney is drafted by a competent attorney experienced in estate planning.
The Statutory Framework
If the Law Office of Noel Lawrence was given financial power of attorney, a principal can invoke a statutory framework for an agent’s authority by “clearly expressing an intention to do so.” The statutory framework specifically includes 22 enumerated powers and specifically excludes 9 other enumerated powers. Once invoked, the principal may modify the statutory framework by express language in the durable power of attorney.
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