What is a power of attorney?

by | Jan 25, 2017 | Estate Planning |

As an important part of estate planning in New York, individuals may prepare a document in anticipation of possible incapacity and the need for another person to make important legal and financial decisions on their behalf. Under a power of attorney, a mentally competent person executes a contract granting another trusted person the power to make legal and financial decisions for them.

This document and a health care proxy is particularly vital for those beginning to show signs of a mentally and physically disease such as Alzheimer’s and who may lose the capacity to sign a power of attorney as the disease progresses. This is important because an adult who becomes incapacitated needs another trusted person, known as an agent in this document, to make decisions on important legal and financial matters.

Otherwise, no one can handle these matters for an individual without a court naming a guardian without the individual’s approval or input. A successor agent may also be appointed if the first chosen agent is unavailable.

The most common power of attorney is a durable power of attorney. This document takes effect when the person signs it and this power continues even when that person becomes incapacitated. A person, however, can also attach certain conditions before the power in the document to another individual is triggered.

A rider may be attached which allows the agent to give gifts or support checks to other designated individuals. This is important for committed couples or if children and others rely on this financial support.

Obviously, this document and its powers may be abused and assets may be misappropriated. Accordingly, New York allows for the appointment of a monitor who has the authority to request records from the agent concerning financial and legal actions under the power of attorney.

Because of these important ramifications, there are important advantages when an experienced attorney assists with drafting estate planning documents such as the power of attorney. An attorney can provide advice on a document that safely and effectively accommodates future needs.

Source: New York City Bar Legal Referral Service, “Power of attorney,” Accessed Dec. 29, 2016