ASK THE LAWYER!

Hi Steven,

My mother is getting up there in age, and just suffered a stroke.  I was told I should get a power of attorney for her.  What is that, and what does it do?

-L.C.

Hi L.C.,

Thanks for writing.  As our population gets older, we are seeing more and more questions similar to yours. Most people already know they should have a will so their estate can be administered and distributed to beneficiaries promptly and efficiently upon their death. 

Unfortunately, many people fail to plan adequately for a situation (permanent or temporary) that leaves them unable to legally handle their business, financial and/or personal affairs.  While the laws can vary from state to state, a Power of Attorney (POA) is basically a written authorization to represent or act on another's behalf in private affairs, business, and/or some other legal matter. A power of attorney should be in writing, signed by you in the presence of a notary public who witnesses your signature. This way, your agent can prove he or she has the authority to act for you. The power may be limited to a particular activity (e.g., closing the sale of your home) or general in its application, empowering one or more persons to act on your behalf in a variety of situations. It may take effect immediately or only upon the occurrence of a future event (e.g., a determination that you are unable to act for yourself).  The party creating the POA is referred to as the “Grantor” or “Principal” and the party named to act on behalf of the Principal is referred to as the “Agent” or “Attorney-in-fact”.   If you do not have a POA and become unable to manage your personal or business affairs, it may become necessary for a court to appoint one or more people to act for you. People appointed in this manner are referred to as guardians, conservators, or committees, depending upon your local state law. 

Many times you’ll see the term durable in relation to the POA; what that means is that the POA power remains in force for the lifetime of the principal, even if he/she becomes mentally incapacitated.  All POA’s don’t have to be so broad so when you or your attorney draft one, you should be sure to go over what the purpose of the POA is for, and how you want to proceed in case of various events.  Another type of POA is springing power of attorney. This is  a power that only takes effect after the incapacity of the grantor or some other definite future act or circumstance. After such incapacitation the power is identical to a durable power, but cannot be invoked before the incapacity. This may be used to allow a spouse or family member to manage the grantor's affairs in case illness or injury makes the grantor unable to act. If a springing power is used, you or your attorney should be careful to specify exactly how and when the power springs into effect. So L.C., you can imagine just how important a POA can be.  You would be surprised how many institutions that your mother probably deals with and how many bills she pays a month that you will be unable to deal with without the POA.  In fact, most people are under the erroneous assumption that in the event of catastrophic illness or injury, a spouse or child can automatically act for them if there is some sort of joint ownership. 

A POA is one of those things that is better to have before you need it. The lack of properly prepared and executed POA can cause extreme difficulties when a person is stricken with severe illness or injury rendering him/her unable to make decisions or manage financial and medical affairs. There are legal procedures to name a guardian, but these normally require formal proceedings and are expensive. This usually involves getting lawyers to prepare and file the necessary papers and doctors to provide medical testimony regarding the mental incapacity of the subject of the action. The procedures also require the involvement of a temporary guardian to investigate, even intercede, in surrogate proceedings. This can be slow, costly, and very frustrating. Advance preparation of the power of attorney can avoid the inconvenience and expense of legal proceedings. This needs to be done while the Principal is competent, alert and aware of the consequences of his/her decision because once a serious, incapacitating incident occurs, it could be too late.  So by preparing in advance it will be you and not a judge that will select who your agent is, as well as saving time, money and the stress of having to go through such a procedure. 

A POA is not written in stone however.  The Principal may revoke it or modify it at anytime they like.  Most times, written notice is necessary to effectuate those changes.  But just because a person is named as an agent once, doesn’t mean they have to be an agent for the rest of the Principals life.

Hopefully, this provides some general understanding of what a POA is and what it does.  As far as your situation, we’d probably have to know more about your mother, her situation and her condition.  If you have any questions you should contact an attorney to discuss your case individually.    

Yours Truly,

Steven  H. Wolff, Esq.

“Ask the Lawyer!” is a blog in which answers to your legal questions submitted to steven@wolfflawnj.com may be answered. The answers to the questions are for informational purposes only and are not to be construed as legal advice or the creation of an attorney-client relationship. The facts of each case is different, therefore you should seek competent legal representation.

The Law Office of Steven H. Wolff, LLC is a full service law firm which can be reached at 973-685-7160.  If you have a legal matter, please contact Mr. Wolff to discuss your case with a free consultation.