Even before your loved one passes away, you may need to assist in the administration of his affairs. One such example is where you are named as the person’s agent or attorney-in-fact under a durable power of attorney. This commonly used estate planning tool allows for a person to be appointed that can carry out the financial affairs just as the individual granting the power can. It is often very useful when the individual becomes incapacitated and can no longer care for himself.
Six Uses of a Power of Attorney for an Incapacitated Person
As the person appointed under a durable power of attorney, you may find yourself needing to exercise your powers for many different reasons. The following is an overview of six of the more common circumstances. These may give rise for the need to use the power of attorney:
- Fixes deficiencies or mistakes made during the estate planning process.
- Continues with a gifting strategy as part of the overall estate plan. Especially when the creator of the power of attorney can no longer do so on his own.
- To improve or update an estate plan on behalf of its creator. This is when there are changes in the law or in the circumstances surrounding the plan.
- Carries out the ordinary and day-to-day tasks of the individual without the need for guardianship proceedings or other court appointments due to the individual’s incapacity.
- To sell, mortgage, pledge, or otherwise encumber an asset belonging to the individual if it would be better served in the form of a liquid asset or invested elsewhere.
- Ensures that the individual’s assets are safe until such time as he or she passes away.
Just as with any other fiduciary chosen under an estate plan, the person in a durable power of attorney has certain duties and obligations that will proceed. It is important to exercise caution before taking actions. Fortunately, you are subject to seek guidance from a capable legal professional.
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