With a durable power of attorney, you are able to appoint someone who would be referred to as your agent or attorney-in-fact to manage your financial affairs or conduct other business for you while you are incapacitated. A durable power of attorney is distinguishable from other types of powers of attorney because it is effective even when you are incapacitated, while a power of attorney that is not durable would not be effective if you became incapacitated. A durable power of attorney may be general or limited. With a general durable power of attorney you grant your attorney-in-fact board powers to do every act which may legally be done by you. On the other hand, a limited durable power of attorney allows the attorney-in-fact to perform only specific acts such as selling property or making investments. As you consider naming someone as your attorney-in-fact in a durable power of attorney, contact an experienced Westchester County Durable Power of Attorney Lawyer who will be able to explain to you the legal significance of executing a durable power of attorney and who will ensure that your power of attorney is in compliance with New York law.
A durable power of attorney can give very broad or very narrow powers to the agent. In drafting your power of attorney, you have enormous flexibility in granting and limiting the power of your agent. For example, with a power of attorney for financial matters, you can grant someone the authority to:
You can even grant your attorney-in-fact the authority to give your spouse, children, parents and other relatives gifts.
N.Y. GOB. Law § 5-1501 et seq.
What is Needed to Execute a Durable Power of Attorney?In order to properly execute a power of attorney, there are certain formalities that must be followed. The power of attorney must be legible. You must sign, date it and your signature must be acknowledged. It must also be signed and dated by the agent named in the power of attorney. Furthermore, there is certain statutory language that must be included in the power of attorney in order for it to comply with New York law. NY GOB Law § 5-1501B. A durable power of attorney typically becomes effective on the date that the agent's signature is acknowledged. However, you can make the power of attorney "springing," so that it only becomes effective in event you become incapacitated or some other contingency occurs.
When Does a Durable Power of Attorney End?If you decide that you need to terminate the power of attorney, you must give notice to the agent. You can revoke a durable power of attorney any time you choose to as long as you are competent. Under New York law revocation of a durable power of attorney occurs automatically if you die, the purpose of the power of attorney is accomplished, or the agent dies or becomes incapacitated. NY GOB LAW § 5-1511.
It is important to understand that a durable power of attorney does not authorize your attorney-in-fact to manage your estate once you pass away. Upon your death, the winding up of your affairs and administering your estate is the job of the executor named in your will. If you want the person who you name as your agent in your durable power of attorney to also handle your affairs after your pass away, you must also name that person in your will as your executor.
What if I do not have a Durable Power of Attorney?The consequence of not having a durable power of attorney is should you become incapacitated your loved ones will not know your wishes for taking care of your financial or personal affairs. Furthermore, there may be no one who has the legal authority to take care of your personal or financial affairs. As a result your affairs may fall into disarray. Ultimately, the court may step in and appoint a conservator to make decisions for you. The court will seek to appoint a family member to act as your conservator. However, if there is no suitable family member available, the court may appoint a stranger who would not be accountable to your family, but who will be accountable to and supervised by the court.
A "conservator of the estate" makes decisions about your finances. He or she will manage your assets, pay your bills, make investments, and collect income. The court will require the conservator of the estate to keep detailed financial records and regularly report to the court about the status of your finances.
The conservator will remain in place as long as the court determines that the conservator is needed. If your medical condition improves enough so that you are able to resume taking care of your affairs, the court will end the conservatorship. NY MHY LAW § 81.36. Otherwise, conservatorships remain in place until you pass away.
What Else Should be Part of My Estate Plan?While a durable power of attorney is an important part of your estate plan, it should not be the only component. A durable power of attorney will only address certain personal and financial issues in the event that you become incapacitated. Another important document is a health care proxy that gives someone authority to make health care decisions for you in the event you become incapacitated.
In addition, you should also consider protecting your assets and financial health while you are living and also planning for how your estate should be handled upon your death. To do this, you will need other essential documents such as a will and a trust. A will is an estate planning tool that most people are familiar with. It 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 also 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 well thought out plan and properly draft and executed estate plan documents will ensure that you meet your personal and financial goals for you and your family.
Issues related to incapacity and end-of-life decisions are very complicated. It is important that you make well-considered choices in advance. An experienced Westchester County Durable Power of Attorney Lawyer will be able to explain to you your options for your durable power of attorney as well as other documents that are essential for planning for future incapacity. The staff at Stephen Bilkis & Associates, PLLC regularly works with New York clients to help them draft durable powers of attorney as well as other estate planning documents. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your estate plan.