A power of attorney is a legal instrument that is used to name someone else to act on your behalf. Our firm is focused on estate planning and elder law matters. Within our realm of the law, durable powers of attorney are often utilized.
You would use a durable power of attorney to name someone to act on your behalf in the event of your incapacitation. This could seem like an unnecessary step to take, but when you look at the facts, you see that incapacity is quite common among elders.
There are many different underlying causes of incapacity as we all know, but Alzheimer’s disease alone is enough to get you to stand up and take notice. The Alzheimer’s Association tells us that around 45 percent of people who are at least 85 have the disease. Alzheimer’s causes dementia, and people with dementia are typically going to become unable to handle their own affairs at some point in time.
If you are thinking that it is unlikely that you will live into your eighties, according to the Social Security Administration, if you are fortunate enough to celebrate your 65th birthday, it is likely that you will in fact live into your eighties.
When you digest these facts, you can see why incapacity planning is relevant. When you have a durable power of attorney in place, a hand-picked decision-maker will be standing at the ready to act on your behalf if you become unable to make sound decisions on your own.
A durable power of attorney can be a useful part of your estate plan, but there are some disadvantages. For one, you may be giving the agent that you name in the document the power to act on your behalf immediately, even before you are incapacitated. This can be disconcerting on a number of different levels.
In addition to this, a power of attorney of any kind would no longer be in effect after your death. As a result, someone could be managing your affairs while you are living, but this person would not be empowered to administer your estate.
To overcome these disadvantages, you could choose to create a revocable living trust. You could act as the trustee and the beneficiary while you are alive and well, and you would name a successor to replace you in the event of your incapacitation.
This successor trustee could also administer the trust after your passing, so you would be accomplishing dual objectives.
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