Many estate planning tools and terminology are foreign to the average person. There is one estate planning tool, however, that most people are familiar with – a Power of Attorney. You may already have a Power of Attorney in place, or you may be named as an Agent in a Power of Attorney (POA) executed by someone else. Either way, you likely have some idea what can be accomplished with a POA. You may not, however, know what a durable POA is. To shed some light on the subject, the Long Island attorneys at Eghrari Wealth Training Firm explain what a New York durable Power of Attorney is and why you might want to include one in your estate plan.
What Is a Power of Attorney?
A Power of Attorney is a legal arrangement that allows you (referred to as the “Principal”) to appoint someone (referred to as your “Agent”) to have legal authority to act on your behalf. There are two broad categories of POAs: general and limited. A general POA confers broad power on the designated Agent. With the power granted to an Agent in a general POA your Agent can do things such as access financial accounts, sign a contract in your name, or even sell your home. A limited POA, as the name implies, only confers limited authority on your Agent. For example, if you need someone to be available while you are out of town for a couple of days to finalize the sale of a vehicle you have listed for sale, you might give them a limited POA that specifies they can act on your behalf to facilitate the sale of the vehicle only. Parents with minor children also frequently use a limited Power of Attorney to give a caregiver the legal authority necessary to consent to medical treatment in an emergency while the child is in the caregiver’s care.
What Does It Mean to Make a Power of Attorney Durable?
Historically, the authority granted in a Power of Attorney would automatically terminate upon the death or incapacity of the Principal. This was a problem because the person creating the POA often wanted someone to have his/her legal authority in the event of incapacity. The solution was the durable Power of Attorney. A durable Power of Attorney survives the incapacity of the Principal and only terminates automatically upon the Principal’s death. Both a general and a limited POA can be made durable.
Is My New York Power of Attorney Durable?
Most issues related to a Power of Attorney are governed by state law, including how a durable POA is created. New York law presumes that any Power of Attorney is durable unless the POA document includes specific language making it clear that the Principal does not want the POA to be durable. In other words, you must expressly state that your POA terminates upon your incapacity if you do not want it to be a durable POA.
Why Might I Want to Add a New York Durable Power of Attorney to My Estate Plan?
There are numerous reasons why you might want to add a New York durable Power of Attorney to your estate plan; however, a common reason to include a general durable POA is to ensure that someone has the authority to take over your finances and take control of your assets if you suddenly become incapacitated because of an accident or illness. Married couples, for instance, frequently create reciprocal POAs for this reason. Always keep in mind though that you are handing your Agent a tremendous amount of power and control when you create a general durable POA so do not do so lightly.
Do You Need Help Creating a New York Durable Power of Attorney?
For more information, please join us for an upcoming FREE seminar. If you need help creating a New York durable Power of Attorney, contact the Long Island estate planning attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.
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