An attorney-in-fact is another term for an agent. An agent is the person you authorize in a power of attorney to act on your behalf. Generally, an attorney-in-fact is authorized to act in the event you are unable to do so. The attorney-in-fact's power and responsibilities depend on the specific powers that you authorize in the power of attorney document. You can grant your attorney-in-fact very specific powers to perform certain duties, or you can grant very broad powers to perform all financial transactions. Because of the potential serious financial and personal ramifications of making someone your attorney-in-fact, it would be wise to consult a Long Island Attorney-in-Fact Lawyer who can help you determine which type of power of attorney is appropriate for your circumstances and make sure that it is properly drafted and executed.
A durable power of attorney remains in effect even when you become incapacitated. For example, if you are injured in a terrible car accident that leaves you in a coma, a durable power of attorney will give your attorney-in-fact the authority to take care of your finances. In contrast a conventional power of attorney would terminate when you become incapacitated. If your goal is to ensure that someone is available to take care of your finances in the event that you are unable to do so because of you are mentally incapacitated, then the power of attorney must be durable. In New York a power of attorney is durable unless it contains language specifically stating otherwise.
When would a power of attorney go into effect?As the principal, you decide when the power of attorney will go into effect. A, conventional power of attorney would go into effect on the date that it is fully executed. However, a power of attorney can also go into effect only upon the occurrence of a certain event, such as you becoming incapacitated. This type of power of attorney is called a springing power of attorney. This type of power of attorney is quite effective to for estate planning purposes as it allows you to execute a power of attorney immediately for the purposes of making sure your financial affairs or cared for if you become incapacitated at some unknown time in the future, while allowing you to retain control over your affairs while you are competent.
What authority will my agent have?Your agent will have whatever authority you choose to grand him or her. If you execute a power of attorney to give your agent the authority to act for you in the event that you become incapacitated, you may decide to grant your agent broad power to handle all of your finances. However, you can give your agent limited power. Examples of authority you may give your agent include authority related to:
At all times your agent is legally required to act in your best interests, keep accurate records, keep your property separate from his or hers, and avoid conflicts of interest.
What is the difference between a power of attorney and a heath care proxy?A power of attorney gives another person the authority to take care of financial and personal matters while a health care proxy gives another person the authority to make health care decisions for you. In other words, a health care proxy is a durable power of attorney for health care.
In your power of attorney you can grant your health care attorney to make decisions as to:
If other health care issues arise that are not addressed in your health care proxy or living will, then your health care agent would have the authority to make those decisions.
What are the requirements for making a power of attorney?New York has specific laws covering what is required to make a power of attorney. In order to properly execute a durable power of attorney the document must be written and executed as required by New York General Obligations Law:
NY GOB Law § 5-1501B
When a does a power of attorney end?A power of attorney always ends automatically upon your death. The person charged with handling your affairs once you pass away is the executor you name in your will. If you would like the person you name as your agent in your power of attorney to also manage your estate once you pass away, then you should also name that person as your executor.
Your power of attorney also ends if:
To avoid problems that may arise due to your agent not being able to perform his or her duties as your agent, it is important that you name a successor agent or co-agents, to ensure that someone will be available to act as you agent. Furthermore, particularly in the case of a durable power of attorney, you should review the power of attorney from time-to-time to make sure that it remains consistent with your current circumstances. For example, you should check to make sure that the person you named as your agent is still the person you want to serve as your agent.
What other documents should be in my comprehensive estate plan?While a power of attorney is an important part of your estate plan, it should not be the only component. A power of attorney only addresses certain personal and financial issues, but is not comprehensive enough to address all issues regarding your estate. You should also consider protecting your assets and financial health while you are living and planning for how your estate should be handled upon your death. To do this, you will need other essential documents such as a last will and testament and a trust.
A will allows you to provide for your loved ones after you pass away. You can leave gifts of cash, stocks, bonds, real property, jewelry, and collectibles to those you care about. You can also indicate in your will who will serve as the guardian for minor children who survive you. A trust is in some ways similar to a will in that it can also be used to leave your loved ones property after you pass away. However, trusts allow you to give gifts during your lifetime. At the same time, if you chose to you can retain control over the assets you give away. Depending on the type of trust, a trust can offer financial benefits such as tax savings and asset protection.
The components that you should consider for your comprehensive estate plan will depend on the size of your estate as well as your personal and financial goals. A prudent estate plan and properly drafted and executed estate plan documents will ensure that you meet your personal and financial goals for you and your family.
I would like to appoint an attorney-in-fact. What should I do next?While a power of attorney may not seem to be complicated document, it involves several complex decisions. Furthermore, the person you appoint as your attorney-in-fact will have a great deal of influence over your finances. Thus, not only must your power of attorney be clear and properly executed, you must also make sure that you select the right person to serve as your attorney-in-fact. To learn more about the advantages of a durable power of attorney and how to select an attorney-in-fact contact Stephen Bilkis & Associates, PLLC. We will not only help you with your questions related to powers of attorney, but we will also work closely with you to make sure that you have a comprehensive estate plan that reflects your individual goals. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your estate plan.