Question: What is a Power of Attorney and why do I need one?

 

Answer: A durable power of attorney is a written document in which you (the “principal”) give another person (the “agent”) the power to act in your place in managing your finances. The powers contained in your power of attorney are generally very broad. The document often permits the agent the power to make gifts, create trusts, sell property, file tax returns and do anything you can do with your assets personally. The agent, however, cannot be given the power to make and revoke a Will for you. While you can modify the document to determine the scope of the powers you wish to grant to your agent, it is generally a good idea to start with more but remove those powers that might not be advisable under the circumstances.

You may name one or more agents under a power of attorney, and direct that one may act alone without the other, or that they must act together (jointly). You can also appoint a successor agent to act in the event the first person(s) you’ve named cannot act. Note that a “durable” power of attorney does not become inoperative upon your incapacity. Upon your death, however, your power of attorney becomes ineffective and the person you name as Personal Representative in your Will is able to take over your affairs.

As always, if you have any questions or would like to learn more, please contact me at sshane@offitkurman.com or 301-575-0313.

ABOUT STEVE SHANE

Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.

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