Durable Power of Attorney - Tips from a Palo Alto Estate Planning Attorney
Posted by Janet Brewer on Mon, May 10, 2010 @ 09:29 AM
A durable power of attorney can help you avoid incompetency proceedings.
One benefit of a living trust, in addition to avoiding probate for trust assets, is that you can name a trustee to manage your estate if you become incapacitated. But a living trust can’t hold, for example, qualified retirement plans. Such plans require you, the participant, to be the owner.
So if you become disabled and your family needs access to your 401(k) plan, an incompetency proceeding would be necessary. Fortunately, you can avoid this time-consuming and potentially unpleasant step by executing a durable power of attorney for property while you’re healthy.
To do so, you simply appoint, in writing, another person, such as a trusted family member, as your agent. He or she then has the authority to make decisions regarding any property you couldn’t transfer to your living trust.
Typically durable powers of attorney for property are drafted to become effective only if the creator becomes incompetent, as most people don’t want their agents to act for them until that time. For example, you may add a provision stating that your property power of attorney becomes effective only after your doctor certifies in writing that you’re unable to manage your business affairs.
Alternatively, some situations may warrant the property power of attorney to become effective on its execution. To be effective, the durable power of attorney must be properly drafted, so professional legal advice is critical.
All the best,
