This is the third of three blogs (Monday, yesterday and today) in which I will discuss the ‘power’ of this important document. I hope you find it helpful.
Having covered the explanation of what a durable power of attorney is, let's look at the top 10 benefits of having a comprehensive durable power of attorney. (5 in yesterday's blog and 5 in today’s blog).
6. Prevents delays in asset protection planning.
A comprehensive power of attorney should include all of the powers required to do effective asset protection planning. If the power of attorney does not include a specific power, it can greatly dampen the attorney-in-fact's ability to complete the planning and could result in thousands of dollars lost. While some powers of attorney seem long, it is necessary to include all of the powers necessary to carry out proper planning.
7. Protects the attorney-in-fact from claims of financial abuse.
Comprehensive powers of attorney often allow the attorney-in-fact to make substantial gifts to self or others in order to carry out asset protection planning objectives. Without the power of attorney authorizing this, the attorney-in-fact (often a family member) could be at risk for financial abuse allegations.
8. Allows attorney-in-facts to talk to other agencies.
An attorney-in-fact under a power of attorney is often in the position of trying to reconcile bank charges, make arrangements for health care, engage professionals for services to be provided to the principal, and much more. Without a comprehensive power of attorney giving authority to the attorney-in-fact, many companies will refuse to disclose any information or provide services to the incapacitated person. This can result in a great deal of frustration on the part of the family, as well as lost time and money.
9. Allows an attorney-in-fact to perform planning and transactions to make the principal eligible for public benefits.
One could argue that transferring assets from the principal to others in order to make the principal eligible for public benefits–Medicaid and/or non-service-connected Veterans Administration benefits–is not in the best interests of the principal, but rather in the best interests of the transferees. In fact, one reason that a comprehensive durable power of attorney is essential in elder law is that a Judge may not be willing to authorize a conservator to protect assets for others while enhancing the ward/protected person's eligibility for public benefits. However, that may have been the wish of the incapacitated person and one that would remain unfulfilled if a power of attorney were not in place.
10. Provides peace of mind for everyone involved.
Taking the time to sign a power of attorney lessens the burden on family members who would otherwise have to go to court to get authority for performing basic tasks, like writing a check or arranging for home health services. Knowing this has been taken care of in advance is of great comfort to families.
This discussion of the Top 10 Benefits of a Comprehensive Power of Attorney could be expanded by many more. Which benefits are most important depends on the situation of the principal and their loved ones. This is why a comprehensive power of attorney is so essential: Nobody can predict exactly which powers will be needed in the future. The planning goal is to have a power of attorney in place that empowers a succession of trustworthy attorney-in-facts to do whatever needs to be done in the future. Please call us if we can be of assistance in any way or if you have any questions about durable powers of attorney.