Durable Powers of Attorney
Serving Massachusetts clients with Durable Powers of Attorney
A power of attorney is a key component of every estate plan estate, but in fact there are several different kinds of powers of attorney that can be used for different purposes here in Massachusetts. Before executing this crucial document, it is important to understand what your options are.
A power of attorney allows a person – your “attorney-in-fact” or agent — to act in your place for your legal and financial affairs in the event of your absence, illness or incapacity. In Massachusetts, powers of attorney can take the following forms:
- A Limited Power of Attorney imposes limits upon the attorney-in-fact, and may restrict the scope of that person’s powers to a single type of conduct or a single transaction. For example, a limited power of attorney could give the attorney-in-fact the right to sign a deed to your home in Braintree or other property for you on a day when you are out of town. It usually ends at a time specified in the document.
- A General Power of Attorney is unlimited in scope and gives your attorney-in-fact all the powers and rights that you have yourself. For example, a general power of attorney may give your attorney-in-fact the right to sign documents for you, pay your bills, and conduct financial transactions on your behalf. A general power of attorney ends on your death or incapacitation unless you rescind it before then.
- A Durable Power of Attorney can be general or limited in scope, but it remains in effect after you become incapacitated. If you become incapacitated without a valid Durable Power of Attorney, no one can represent you unless a court appoints a conservator or guardian. A durable power of attorney will remain in effect until your death unless you rescind it while you are not incapacitated.
- A Springing Power of Attorney, similar to a durable power of attorney, can allow your attorney-in-fact to act for you if you become incapacitated, but it does not become effective until you are incapacitated. In reality, the power of attorney that becomes effective upon disability (a “springing” power) is not very effective since each time it is used, the attorney/agent must submit evidence of disability.
A Durable Power of Attorney tends to be most effective for Estate Planning and Elder Law in particular, since it is often the event of disability which requires the use of the power of attorney. The enumerated powers of the attorney-in-fact must be specifically set forth in the document and should generally be broad enough to include gifting to accommodate future long-term care planning funding needs and estate tax minimization. A properly drafted Durable Power of Attorney should ensure that any proceedings remain private, while keeping you and your family out of the Probate Court during your lifetime.
It is important to think carefully about who will be your attorney-in-fact. Your attorney-in-fact will have a lot of control over your finances, and it is critical that you trust him or her implicitly. The Durable Power of Attorney should include protective measures, in the event there are any potential conflicts with the attorney-in-fact (i.e. that person be a party to your estate or one entitled with the power to levy gifts to him or herself).
Generally, there should be no more than two signed originals—retained in a secure location by the principal, trusted CPA or lawyer who drafted the originals. These are very powerful documents and great care should be taken concerning their accessibility and whereabouts.
To learn more about Durable Powers of Attorney or any other aspect of Estate Planning or Elder Law, call Attorney Zine at 781.930.3003 or e-mail us to schedule a free consultation.