In our previous post, we began looking at durable powers of attorney and how they match up to guardianships. A power of attorney is a document giving another individual the legal authority to act on one’s behalf. The scope of that authority can be general or specific, limited to a particular asset, transaction or period of time. Another feature of powers of attorney is that they can be made effective immediately or upon incapacity.
Regular powers of attorney are only valid while the person signing the document understands the nature of the arrangement. Powers of attorney are “durable” when they remain in effect eve if the person has become incapacitated. For this reason, the latter can be executed years in advance.
One benefit of a durable power of attorney is that they can avoid the need for guardianships in most cases. Because guardianships involve court authorization and oversight, it can be expensive and time consuming, and a good thing to avoid for many people. No court proceedings are required with a power of attorney.
As with many other aspects of estate planning, the do-it-yourself is attempted by some people, using forms available to the public. While these may suit the needs of some individuals, they will not be adequate for all. Because powers of attorney hand great power over to another individual, it is wise to consult an attorney to ensure that one structures the arrangement properly and thinks through all its implications. An attorney who understands the ins and outs of powers of attorney is an indispensable resource for this purpose.
Source: northjersey.com, “Judge to consider oversight of Zsa Zsa Gabor,” May 2, 2012