Power of Attorney: How it can save YOUR future assets
Updated: Mar 16
Are you familiar with a power of attorney, how it may help your family and how it can protect your future assets?
I'm Leslie Sultan. I'm an estate planning attorney in New York and New Jersey, and I want to make sure you appreciate the importance of a power of attorney. (Watch video instead)
I'm going to start with the definition: A power of attorney is a legal, written document in which one person (the principle) appoints another person (the agent) the power to make decisions on their behalf. This can include both financial decisions and legal decisions.
For example, power of attorney can be used to help our aging parents.
Let’s say they might be having memory issues and you’d like to plan for their future. One strategy is to ask each of your parents to do a power of attorney, giving legal authority to each other, and then later when needed, giving a subsequent authority to their children (you).
WHY IS THIS IMPORTANT?
Let me give you some examples. I have a client who came to me recently looking to help his elderly parents. His stepfather has memory issues and then got COVID. Once he recovered from COVID, his stepfather couldn't remember anybody or anything, so my client came to me to do a guardianship petition.
WHAT IS A GUARDIANSHIP PETITION?
That's what happens when you don't have power of attorney for someone. You must ask a judge to appoint you to act in a legal capacity for that person in order to make decisions for them.
In this case, the stepfather owned an apartment and needed to be able to transfer the asset (the apartment) out of his name in order to qualify for Medicaid and continue to get health care services. As you can tell it can get complicated and messy. A Guardianship Petition involves a court and attorneys. It can get expensive. You have to pay an attorney an hourly rate or an expensive flat rate.
In the hopes of avoiding the court process, I asked my client to check through his stepfather's paperwork, to see if he could find any documents. After doing so he found a properly signed power of attorney! (WOO-HOO!) He saved a ton of money because he had the necessary legal document giving him the authority to act on his stepfather’s behalf. This was a big win for my client.
Having learned a valuable lesson, this client hired us to create a power of attorney for his mother, and now both parents are protected. They can move forward without any expensive legal action.
HOW ABOUT YOUR FAMILY? DO YOUR PARENTS HAVE POWERS OF ATTORNEYS? HAVE YOU SPOKEN TO THEM ABOUT THIS?
It is an important conversation to have, because what would happen right now if something happened to your parents and they didn't have the capacity to make decisions, would you step in? Would you be able to go to court? Would your siblings be fighting about this?
I'd love to hear if you have a story about this and if you have any questions, feel free to contact us.
About the Author
Leslie has been practicing law since 2009 and is the host of the estate planning podcast 'Legacy Purse'. She has a long history of representing family members struggling to inherit property and/or wealth from deceased family members through the Probate Courts. Knowing how time-consuming and expensive the probate process is, Leslie takes great pride in helping her clients learn how to plan and protect their families during their lives so they can avoid the probate court process and save their loved ones that additional grief (and expense).