Durable Power of Attorney: Another Opinion

Durable Power of Attorney
By Jerrold E. Bartholomew

The durable power of attorney is extremely valuable estate plan document. It allows one person to designate an agent to conduct all financial affairs. These documents are typically durable meaning that the power continues through the disability of the principal (the person naming an agent). Alternatively, there can be springing powers of attorney, which only come into effect when the principal is incapacitated. Springing powers of attorney can be attractive in many ways since the principal’s assets remain untouchable while they can still be used and enjoyed by the principal. But many financial institutions will not honor a springing power of attorney. The apparent rationale goes like this: “You didn’t trust him while you were able to watch over your own affairs. Why should we trust him now?”

The durable power of attorney is clearly susceptible to abuse. When another can act with full authority on your behalf, it is entirely possible that the power will be used to make self-interested transactions or even unauthorized gifts to the agent.

But if a trustworthy agent can be found, the power of attorney can save countless hours of worry, avoid dissipation of an estate (what would happen if no one paid your heating bill over the winter?) and, most importantly, avoid the need for probate court orders to handle your affairs. The durable power of attorney is worth the modest fee charged by most attorneys.

SOURCE: michiganlaw