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| POWER OF ATTORNEY A Power of Attorney (POA) is the power to sign legal documents for another person. And this power is greatly misunderstood. Several nuances of the POA need to be understood in order to fit it into your estate plan properly. It is, first of all, the power to do business for another person. It is not the power over anyone's body. It is power over belongings. In fact, it should be properly called a "Business Power of Attorney." A POA is good only during the person's life. If and when he dies, the POA is extinguished. So, do not think that a POA is a substitute for your will. When the person dies, the POA is invalidated; it has become extinct. A POA has two dimensions; it has breadth ... and it has depth. Let's look at breadth first; if it is a "General" POA, it is as broad as the equator. It covers everything. And, if a general POA does not state a starting point, it becomes operable immediately. So, when you give someone your general power of attorney without stating a starting point, that person can go waste all your assets right now. Enter the concept of "Springing." A POA can spring from a certain event. For example, someone could give you his power of attorney and say that it comes into being or springs into being only when he embarks on an International Air Plane Flight. Or, more often, he could make it spring from this event: "If two board-certified physicians determine that I am incapable of taking care of my affairs and so state in writing, this POA springs into being." If you want the POA to be less than a general power of attorney, you might decide to limit it and to thus make it a "Limited Power of Attorney." If you were moving to another city and had found a house you wanted to buy, you might give someone your limited power of attorney to buy the house and to sign all relevant papers while you are in the process of moving your family and household goods. In addition to breadth, a POA has depth. If a power of attorney doesn't explicitly state the contrary, it is extinguished when you become disabled. So, if you want the POA to "endure" your disability, you can make it a "durable" power of attorney. Most POA's written in recent times are, indeed, Durable Powers of Attorney. Do you need a POA if you have a Living Revocable Trust (LRT) and have named a Standby Trustee to take over in case of your disability? Yes. You still need a POA because you may have ownership of items that are not in your LRT and, hence, not under the power of the Standby Trustee. In addition to a POA, you need a Medical Power of Attorney (MPOA) that tells what medical procedures you would want done if you were not of a disposing mind. Many states have combined the MPOA with a Living Will. Still others call the documents related to this issue an Advanced Medical Directive. Consult local legal counsel to see exactly which documents you need in your state. |
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