Power of Attorney
A power of attorney is an authorization for
another to act in your place for the purposes
stated in the document. A power of attorney can
be broad and allow another to perform anything
you can do or it can be specific to one
activity. The power can be effective for one day
or for an unlimited amount of time.
General Power of Attorney
This type of instrument allows the attorney
in fact to perform all acts the individual can
perform but would in most cases not be effective
if the individual becomes mentally
incapacitated.
Durable Power of Attorney
This instrument allows the attorney in fact
to perform all acts for the individual and would
remain effective during a period of mental
incapacity.
Springing Power of Attorney
This instrument becomes effective only upon
the happening of a specified event, hence it
springs into life. Illness, vacation, etc. might
all be springing events making the document
effective. These conditions can sometimes be
difficult to establish.
Limited Power of Attorney
As stated above this instrument is effective
for a limited purpose. A common example is an
attorney who receives a power of attorney from a
client selling a home to attend the real estate
closing and to sign papers on the client's
behalf and return the check to the client. It is
limited and it expires as soon as the act is
completed.
A power of attorney expires with the death of
the grantor of the power. for most people, a
durable power of attorney is the best choice.
Guardianship
While we do not "plan" for
guardianships it is important to realize that it
is possible that we may be in need of a guardian
at some point in the future. They are court
approved. There is no estate tool for creating a
normal guardianship. There are costs associated
with the action and they can be costly. A power
of attorney can sometimes delay the need for a
guardian for quite a period of time.
Organization of assets can help reduce the
costs.
Guardianships are processed through the
Superior Court and can run into the thousands of
dollars. Sometimes they cannot be avoided but as
noted above a power of attorney may delay the
need and in many cases may eliminate the need
altogether.
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