A power of attorney is created by a principal to give authority to a person who is designated as an agent. The agent, or attorney in fact has the ability to take actions on behalf of the principal. The agent essentially acts as if he was the principal. If the agent enters into a contract, for example, it is as if the principal has signed the contract himself.
Power of attorneys serve many different purposes. For example, if you plan to be out of town when closing on a house, you can give someone power of attorney to sign the real estate forms and paperwork for you. In this type of situation, you would create a limited power of attorney to give someone specific authority to take action for you and act as your agent in a specific circumstance.
It is also possible to create a general power of attorney, which allows your agent to broadly act for you on all matters. Creating a general power of attorney is usually part of the creation of a comprehensive estate plan. However, you need to make sure that creating a power of attorney is the right choice for you and you must ensure you create the correct type of power of attorney. For most people, this means creating a springing durable power of attorney. An experienced Smithtown estate planning lawyer at Eghrari Wealth Training Law Firm can help you to determine if a power of attorney is necessary and can help you to take the appropriate legal steps to create one.
The Importance of a Durable Power of Attorney
When you create a power of attorney and transfer authority, you must ensure you follow state laws. You have to use the correct language, and make clear the extent of the authority that you are transferring to your agent. For example, if you hope for your power of attorney to protect you by allowing an agent to act for you if you become incapacitated, you may need to specify that the power of attorney should be durable.
New York Code of General Obligations section 5-1501A establishes the rule that a power of attorney is durable unless the power of attorney expressly states that the authority granted to the agent will be terminated upon incapacity of the principal. Not every state has this law on the books, however. In some states, if you do not expressly state that the power of attorney should be durable, then the grant of authority would end as soon as you became incapacitated. The result of this is when you need your agent to take action on your behalf, your agent would lose the authority to do so.
Because NY law makes a power of attorney grant of authority durable by default, you do not have to worry about accidentally making a mistake and having a power of attorney that doesn’t protect you in case of incapacity. However, if you or a loved one live elsewhere or if you created a power of attorney while living outside of New York, you cannot necessarily count on the law ensuring that your power of attorney will remain in effect when you need it. You should confirm with an estate planning lawyer to make sure your power of attorney is durable so your agent is able to immediately begin managing your assets when you need help.
What is a Springing Durable Power of Attorney?
When you have a durable power of attorney, you can rest assured your agent can continue to keep authority when you are incapacitated. For many people, however, you may not want to transfer authority to your agent until you actually become incapacitated. A springing durable power of attorney provides you with this option.
When you create a springing durable power of attorney, the transfer of authority to your agent doesn’t become operative right away. Instead, you set a condition in the future when your power of attorney becomes active. A springing durable power of attorney gets its name because it springs into action at the specific time you determined. You can specify your springing durable power of attorney will spring into action and give your agent authority as soon as you become incapacitated. This means your agent will have authority when you need him to because you can’t act on your own- but not until that time.
How Can a Smithtown Estate Planning Lawyer Help You Create a Power of Attorney?
A Smithtown power of attorney lawyer at Eghrari Wealth Training Law Firm can provide you with the help you need to create a springing durable power of attorney. Give us a call at (631) 265-0599 or contact us online to learn more about how an estate planning and trusts lawyer can help you. You can also download our estate planning checklist so you can make sure you have a comprehensive plan in place for the future.
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