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Key Issues You Need To Know When Using a Power of Attorney




Have you created an estate plan? How long ago? In fact, when was the last time you took it out and reviewed it?  Were you aware that your estate plan is an important tool? It can help you protect yourself, your loved ones and your business. In addition it can help you plan forward to create the legacy that you want to leave at the end of your life. This can all be accomplished when you work with an estate planning attorney. Your attorney is going to discuss with you not only the planning for the end of your life but also the planning you need to protect yourself during your life. 


So an important legal planning tool you should have to protect yourself during your lifetime is the durable power of attorney. Why? Because this legal planning tool allows you to name a person who you trust as your agent, or attorney-in-fact. This trusted individual will have legal authority to act on your behalf should you not be able to and to take actions such as:


  • Paying your bills, 

  • Ensuring you are paid on time, 

  • Managing your finances, 

  • Collecting rent, sell real property, or managing real property transactions,

  • Getting your mail,

  • Applying for public benefits, 

  • and so much more. 


The “durability” part of the power of attorney makes sure that your agent is able to act at the time you are incapacitated.


There are many positive reasons why you would create a durable power of attorney, but could there be any issues that might come up? We have a few key issues for you to know about when considering a durable power of attorney. 


1. There may be a loss of control over yourself and your finances. Be aware that when naming another individual as your agent it means you are giving them significant control over your affairs. Depending on the extent of the document you create, your agent may have the ability to make decisions and take actions that could have long-lasting consequences. You will want to discuss this in detail with your estate planning attorney.


2. There may be a problem if your financial institution refuses to recognize the document. As stated above, your durable power of attorney is a legal document, but it does provide a tremendous amount of power to your agent. So there may be times when your financial institution will not immediately recognize the legitimacy of your estate planning. When meeting with your estate planning attorney, find out what steps can be taken to avoid this inconvenience  and how they can help you.


3. There may be a possibility to use a copy instead of the original. Talk with your estate planning attorney to find out whether you may use the copy of your durable power of attorney like the original. Also, talk about who you should tell about the creation of your durable power of attorney and who has the authority to act on your behalf.


4. There must be thoughtful decision making when choosing the right agent. You need to choose someone you trust. Unfortunately, there is always a risk that the agent may abuse their authority or act in their own self-interest. It can be particularly concerning if you are in a vulnerable position or if there is a lack of transparency in the agent's actions. Talk to your attorney about your concerns and they may recommend a professional who is bonded and licensed to provide you with the support you need. 


5. There may be misuse or waste. Most agents act responsibly and in the best interests of the person they are caring for. However, there is always the concern for misuse, waste, and even abuse of the legal authority granted through the durable power of attorney. Be sure to discuss this concern with your experienced estate planning attorney and what could be done to limit this potential. They may suggest naming a second or third in command within your durable power of attorney in the event your chosen agent is no longer able to act.


We are prepared to help you navigate these complex issues with empathy and expertise. Even with these potential issues, your durable power of attorney is a powerful and important tool to add to your estate planning arsenal. We aim to help you feel secure about these things with good estate and long-term care planning. Get in touch with us to chat more about this! 


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