What are these powers?
A power of attorney is a written document in which a competent adult person (the “principal”) appoints another competent adult person (the “agent”) to act on behalf of the principal. In general, an attorney-in-fact can perform any legal function or task that the principal has a legal right to do for himself.
The term “durable” in reference to a power of attorney means that the power of attorney remains in effect for the principal’s life, even if he/she becomes mentally incapacitated. A principal can cancel a power of attorney at any time and for any reason. The powers granted in a power of attorney can be very broad or very limited according to the needs of the principal.
Why is power of attorney so important?
Every adult has day-to-day matters to manage, such as paying the bills. Many people are under the impression that in the event of a catastrophic illness or injury, a spouse or child can automatically act on their behalf. Unfortunately, this is often incorrect, even when joint ownership situations exist.
The lack of a properly prepared and executed power of attorney can cause extreme hardship when a person suffers a serious illness or injury that prevents them from making decisions or managing financial and medical matters. All states have legal procedures, guardianships or conservatorships, to provide for the appointment of a guardian. These normally require formal procedures and are expensive in court. This means the participation of lawyers to prepare and present the necessary documents and doctors to provide medical testimony about the mental incapacity of the subject of the action. The proceedings also require the involvement of a temporary guardian to investigate, even intercede, in substitution proceedings. This can be time consuming, expensive and very frustrating.
Preparing the power of attorney in advance can avoid the hassle and expense of legal proceedings. This must be done while the principal is competent, alert, and aware of the consequences of his decision. Once a serious problem occurs, it is too late.
The power of attorney can take effect immediately after signing or only in case of incapacity. Some examples of powers of attorney contained in the Power of Attorney are as follows:
1. REAL ESTATE: To execute all contracts, deeds, bonds, mortgages, promissory notes, checks, drafts, money orders, and to lease, collect rents, grant, negotiate, sell or borrow and mortgage, and manage, commit, liquidate , and adjust all matters related to real estate.
2. ENDORSEMENT OF PROMISSORY NOTES, ETC.: Make, execute, endorse, accept and deliver each and every one of the bills of exchange, checks, drafts, promissory notes and commercial acceptances.
3. PAYMENT OF PROMISSORY NOTES, ETC.: To pay all sums of money, at any time or times, that I owe from now on on any bill of exchange, check, bill of exchange, promissory note or commercial acceptance, made, executed, endorsed, accepted and delivered by me, or by me and on my behalf, by my Agent.
4. STOCKS, BONDS AND SECURITIES: To sell any and all shares, bonds or other securities, now or in the future, belonging to me, which may be issued by an association, trust or corporation, whether private or public , and to make, execute and deliver any assignment, or assignments, of such stocks, bonds or other securities.
5. CONTRACTS, AGREEMENTS, ETC.: Enter into safe deposit boxes, and enter into, sign, execute, and deliver, acknowledge, and perform any contract, agreement, writing, or thing that may, in my Agent’s judgment, be necessary or proper for be celebrated, made or signed, sealed, executed, delivered, recognized or performed.
6. BANK ACCOUNTS, CERTIFICATES OF DEPOSIT, MONEY MARKET ACCOUNTS, ETC.: To add or withdraw any amount from any of my bank accounts, Certificates of Deposit, Money Market Accounts, etc. on my behalf or for my benefit. Make, execute, endorse, accept and deliver each and every one of the checks and drafts, deposit and withdraw funds, acquire and redeem certificates of deposit, in banks, savings and loan associations and other institutions, execute or release said trust deeds or other guarantee agreements that are necessary or convenient in the exercise of the rights and powers granted herein; Without being bound or constrained in any way by the foregoing, to carry out banking transactions as set out in section 2 of PL 1991, c. 95 (c. 46:2B-11).
7. TAX RETURNS, INSURANCE AND OTHER DOCUMENTS: Sign all federal, state and municipal tax returns, insurance forms and any other documents and represent myself in all matters related to the above.
You should contact your attorney to prepare a power of attorney, along with a will, living will, and other vital estate planning documents.