Understanding Financial Powers of Attorney

New York State Estate Planning Attorney - Law Office of Andrew M. Lamkin, P.C.Good estate planning involves more than just preparing a will. It not only involves planning for the dispersal and finalization of your estate after you die, it also involves the following:

  • Avoiding probate disputes,
  • Reducing estate taxes,
  • Planning for your needs if you become unable to care for yourself,
  • Protecting your estate from unforeseen creditors, and
  • Providing for the protection for those who will inherit your estate.

A financial power of attorney (also called a durable power of attorney) enables you to give someone else the authority to make financial decisions for you, in the event that you become unable to manage your finances yourself. The person to whom you give this authority will be called your agent and is usually an attorney or a family member whom you trust to make financial decisions on your behalf.

Your agent will take care of routine tasks, such as checking your mail and paying your bills, as well as more complex tasks, such as managing your retirement account and filing your taxes. He or she does not have to be a financial expert, but rather someone who is trustworthy and has common sense. Whenever necessary, your agent can hire other professionals to handle tasks that he or she is not capable of handling.

A financial power of attorney can be drafted to take effect immediately or when you become incapacitated. Spouses often have active durable powers of attorney that authorize each spouse to handle the financial tasks of the other whenever they out of town or otherwise unavailable to do so. Others draft powers of attorney that will be activated only when a doctor certifies, in writing, that they have become incapacitated.

In New York, a durable power attorney must specify the following:

  • The powers you are granting,
  • That these power will exist even after you become disabled or incompetent,
  • To whom you grant these powers,
  • The specific financial transactions you grant your agent the authority to manage, and
  • That this power of attorney may be revoked by you at any time.

The State of New York has its own durable power of attorney form that is readily available on the internet. However, it is not mandatory to use the state’s form. In fact, some banks and financial institutions have their own forms for granting someone authority to manage another’s accounts.

In any event, your durable power of attorney must be signed in front of a notary public (or two witnesses) and with your selected agent present. Once you have completed and properly signed the form, your power of attorney will be valid until your death. This means that you cannot use a durable power of attorney to grant someone the authority to handle financial matters after your death. This authority must be granted to the person in your will by naming he or she as the executor of your estate. That person will then have the authority to handle specific matters, such as paying off debts, distributing property to beneficiaries, and arranging the funeral and burial.

The Law Office of Andrew M. Lamkin, P.C. – Estate Planning Attorney

It’s important to have an experienced lawyer working with you when establishing power of attorney. We can help you develop a plan for how your finances and healthcare will be handled if an accident, illness, or medical condition renders you incapable of making these crucial decisions yourself. Call the Law Office of Andrew M. Lamkin, P.C. at 516-605-0625 or contact us here for a consultation.

Exactly How Does Power of Attorney Work?

Long Island Power of Attorney Lawyer - Law Office of Andrew M. Lamkin, P.C.Some people think that establishing power of attorney is only for the very wealthy, or those with pressing health concerns. In fact, it’s a good idea for every person to have this important safeguard in place. With the help of a good power of attorney lawyer, the process need not be complicated. To start, we’ll discuss a few different types of powers of attorney and how they work.

Types of Power of Attorney

  • General power of attorney. In essence, general power of attorney gives someone of your choosing the power to act on your behalf. This might involve managing financial transactions, settling claims, operating your business, or handling gifts. General power of attorney is useful for those who may foreseeably not be able to operate at their full mental or physical capacities. It can also be useful for people who travel abroad often, and need a trusted individual to have the right to act on their behalf in the U.S. General power of attorney is often included in an estate plan.
  • Special power of attorney. This works similarly to general power of attorney, but you specify exactly which powers you want your chosen agent to have. Commonly, these will include selling property, managing real estate, handling financial transactions, and collecting debts. You might choose to designate special powers of attorney if you have health concerns, or if you have commitments that draw you away from certain tasks.
  • Healthcare power of attorney. Giving an agent healthcare power of attorney gives that person the power to act on your behalf if you are medically incapable of making your own decisions regarding your care and treatment.
  • Durable power of attorney. Signing this order means that whatever power of attorney you have given your agent will remain valid. Certain situations and health conditions make it wise to have this document in place.

How to Establish Power of Attorney

The first step is to choose a trusted individual to be your agent. It might be a family member, a friend, or an attorney, but no matter who it is, you must trust them implicitly to act in your best interests. They should keep careful records of every transaction undertaken under your name. You may designate multiple agents, but keep in mind that doing so can result in delays when it comes to taking action. Once you have chosen your agent, it’s time to sign the power of attorney. You must be of sound mind when you sign the document, so if there is any chance that this could be called into question, you might consider having a doctor attest to your mental competency prior to signing.

It’s important to have an experienced lawyer working with you when establishing power of attorney. Contact us at the Law Office of Andrew M. Lamkin, P.C. for a consultation. We can help you develop a plan for how your finances and healthcare will be handled if an accident, illness, or medical condition renders you incapable of making these crucial decisions yourself.

The Importance of a Power of Attorney

A power of attorney is a written document designed to allow someone of your choosing, an agent, to make legal decisions on your behalf in the event that you are incapacitated and unable to do so. Though establishing a power of attorney may seem like a project for a rainy day, there is no better time to address the matter than the present. A carefully considered power of attorney can give you the peace of mind that your wishes will be respected even if you are not able to voice them yourself.

Powers of Attorney

Depending on your specific needs, there are three types of power of attorney generally used. All provide you with the freedom to appoint someone as your agent and dictate the terms of that person’s role in managing your legal decisions. The common types of powers of attorney include the following:

  • A conventional power of attorney remains effective from the time you sign the document until you are deemed incapacitated.
  • A durable power of attorney remains in effect from the time you sign the document and during your lifetime.
  • A springing power of attorney goes into effect once a specific event has occurred, such as becoming incapacitated.

The Importance of Powers of Attorney

One of the more critical aspects of estate planning is understanding that a power of attorney can ensure that your voice is heard even when your ability to speak has been compromised. By placing this responsibility for carrying out your wishes in the hands of the most trustworthy person available, you are taking measures to ensure that certain legalities do not become an issue during a time that complications are least welcome.

Aside from the importance of having your wishes honored, a power of attorney saves families from facing medical and legal decision-making that may cause emotional anguish or uncertainty, or create relationship discord when family members disagree with how a situation should be handled. Matters that a power of attorney can address include:

  • Do-Not-Resuscitate orders (DNRs)
  • Acceptable medical interventions
  • Life-sustaining measures such as artificial feeding
  • Buying or selling real estate
  • Management financial affairs
  • Entering into contracts or business negotiations

The Bottom Line

The purpose behind estate planning is to make certain that matters are handled to your preference if you are unable to actively make sound decisions. The power of attorney is key for making this possible. Your agent will exercise the authority to make decisions on your behalf based on your individual preferences. Thus, the power of attorney removes the guesswork concerning your wishes once your family is faced with important decisions regarding your medical care and financial affairs.

If you are ready to move forward with a power of attorney, Andrew M. Lamkin is able to see that your individual needs are addressed. Call or use our contact form to contact Andrew M. Lamkin today. He will make sure your voice is heard.

Like us on facebook