A durable power of attorney is a document by which you give to another person (your “agent”) the authority to take legal and financial actions for you, on your behalf. Powers of attorney are commonly used in elder law and estate planning to enable children to collect money and pay debts for parents suffering from dementia or another debilitating condition. Powers of attorney may also be used in other circumstances, such as where a married couple are buying a home, but one spouse cannot attend the closing. By using a power of attorney, one spouse can sign the closing documents on behalf of both.
Did you know that you can give durable powers of attorney to as many people as you choose? For example, you can give one to each of your children, and one to your lawyer. Notwithstanding, it is generally not advisable to give out more than one durable power of attorney at any given time. Further, should you need to do so you can easily cancel a durable power of attorney by “declaring” that it has been revoked. You should give actual notice of the cancellation, in writing, not only to the holder but also to all those people and institutions you believe might be asked to honor the durable power of attorney. Revocation in writing is preferable because the writing evidences that you took affirmative action to revoke the Power of Attorney. Also, it is advisable to get back all copies of the durable power of attorney if possible.
When giving a New York durable power of attorney, there are several opportunities to minimize your risks:
(1) give a durable power of attorney to a third person, such as your attorney or friend, to hold until it must be used;
(2) sign a “springing” durable power of attorney, which only becomes effective at the time you become incapacitated whereon it “springs into effect”;
(3) name more than one person as your agent and designate that they must act jointly. The problem with the last opportunity is that, in time of need, all agents must be located and must act together, which may be impossible should one or more be unavailable for any reason.
Preparing a NY durable power of attorney is perhaps the single most important thing that one can do to protect his or her assets. However, the durable power of attorney is a powerful document and one should exercise great care in distributing same.
Mark A. Krohn, a partner, is in charge of the Business Law Team and is also a member of the Trust & Estates Team and is a CPA. He can be reached by phone at our Walden, NY office at 866-303-9595 toll free or 845-764-9656 and by email.