Durable Power of Attorney:

When You Do Need to Give Others Control of Your Property

Are you out of your mind?” So thought Aditya—a well-traveled engineer in his forties with an international client base—when his attorney first suggested he name someone to control his bank accounts, make his mortgage payments and complete and sign his taxes.

Too polite to speak his misgivings, Aditya revealed them in his face. “No, no. I’m not asking you to give away the store,” the attorney assured with a smile. “These powers would spring to life only when you need them.”

“For example?”

“Let’s say you had a serious accident on one of your trips. Doctors confirm you can’t manage your finances for a while. If you have completed a durable power of attorney for property management and finance, someone you have chosen could immediately pay your medical bills and mortgage.”

“And if I haven’t done this, what would happen?” Aditya queried.

“Without it, the court would have to appoint a conservator for you,” the attorney said with a grimace. “That’s called, logically enough, a court conservatorship.

Incapacitated by an injury, a woman is grateful she had appointed a conservator.

In some cases it’s the only solution, but, believe me, you want to avoid it if you can. It’s expensive and unpleasant. After all, they have to discuss your mental competence in public, and in the end they may appoint someone you would not want.”

“‘Power of attorney’ does not imply an actual attorney, does it? “No. Attorney is used in the broad sense of someone acting in your place and on your behalf, not an attorney-at-law, like me.”

“How important is this document?”

“Well, once after I had given an estate planning seminar and reviewed the tools of the trade, an emergency-room nurse who was in the audience spoke up. ‘Accidents happen. Everyone should have a durable power of attorney for property management, no matter what your age, if you own property and have bills’.”

“Is it a long document?”

“It can be, depending on what you want your representative to do,” the attorney said. “But this is typical,” he added, handing Aditya something that looked like an accountant’s to-do list. It read:

• Make deposits and withdrawals from bank accounts
• Sign tax returns and appoint qualified individuals to represent the principal with the IRS in order to make investment decisions
• Deal with retirement plans, including IRAs
• Have access to the principal’s safe-deposit box
• Create a living trust and fund a previously created living trust
• Revoke or change beneficiary designations
• Vote the principal’s stock
• Forgive or collect the principal’s debts
• Enter into contracts on behalf of the principal
• Make gifts on behalf of the principal
• Disclaim gifts or bequests made to the principal
• Deal with life insurance on the life of the principal

There were a few people, very few, to whom Aditya would give these powers. He did not relish a judge he did not know making that choice for him.

“Let’s get it drafted,” he declared firmly.

For more information on durable powers of attorney for property management and finance, visit Your Power of Attorney page on the HHE Web site by clicking here .