A Durable Power of Attorney is the most likely needed estate planning document in the near term
for most clients. A well-drafted durable power of attorney often saves clients and their
families considerable delay, inconvenience, expense and court involvement. In order to sign a
durable power of attorney, however, you must be able to name one or more persons in whom you have
complete trust and confidence that they will never abuse their authority.
Power of Attorney Act became law on October 1, 2011. If you have a power of attorney dated
before this date, it is worthwhile for you to have a new durable power of attorney prepared.
Although the new law provides that existing powers of attorney, if properly executed, are still
valid, the new law provides many benefits. Additionally, with a power of attorney signed before
October 1, 2011, you must be prepared for reluctance and delay of financial institutions to accept
an older durable power of attorney.
Under the old power of attorney law, there are no
provisions regarding how much time a financial institution can take when determining whether the
institution will accept your power of attorney. However, provisions under the new law allow
your agent to limit the time a financial institution has to accept or reject a power of attorney
under special circumstances. Specific provisions need to be included in your new durable power
of attorney to take advantage of the new provisions.
The new durable power of attorney
law allows you to grant to agents certain "super powers" that will allow your agent to
make changes in your estate plan and to minimize taxes if tax laws change. The most often used
"super powers" under the new law are those relating to the authority to do Medicaid or VA
benefit planning for you in the event your health declines and you require long term care. The
long term care planning provisions allow your agents to take the steps necessary to preserve your
assets rather than depleting assets for long term care costs.
An important aspect of
the new law is that your agents will only have the specific powers and authority enumerated in your
durable power of attorney. Neither you nor our office knows what powers and authority your
agents may need in the future. Accordingly, it is necessary that we provide to our clients a
lengthy, comprehensive durable power of attorney containing the super powers that we most likely
expect clients to need in the future.