Incapacity Planning: Durable Power of Attorney
Estate planning is the managing and passing of your assets through the preparation of documents and re-titling of assets. The process of linking asset protection with estate planning is called integrated estate planning and they work together to form a comprehensive plan. Having one without the other is incomplete. Every person should have an estate plan so that they can control who gets their assets at death. In addition, the estate plan covers an individual should he or she become incapacitated.
The durable power of attorney is a legal document that names a person, also known as an agent, to handle financial matters for you. “Durable” means that the document withstands incapacity. Some states allow you to have a “springing durable power of attorney,” which springs into effect only in the event that a physician signs off on your incapacity; however, Florida recently changed its law and does not allow springing powers for powers of attorney unless it is for medical purposes.
The net effect of a durable power of attorney is that you have to be very careful whom you choose as your agent because that person’s power is effective immediately upon your signing the document. With that in mind, a good Florida attorney will show you how to avoid the potential for abuse. It is important to have this document in effect as it may assist you to avoid the need for a guardianship in the event of your incapacity since the document will remain in effect despite your incapacity.
The durable power of attorney is used for financial and business matters. For instance, an agent would have the power to open and close bank accounts for you as well as buy stock. The agent acts in the capacity of a fiduciary, which means that person is in a trusted position and must act prudently on your behalf. This power of attorney can also be used to sign business papers and enter into contracts in the name of the principal, or the person creating the durable power of attorney.
It is important to note that this power cannot be delegated. For example, if you delegate the power to your father and he remarries, your father cannot “delegate” this power to his new wife or anyone else. An agent can’t give someone else the power to be another person’s agent, only you can.
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