An important part of estate planning is the consideration of and preparation for possible incapacity. If you become mentally incapacitated and unable to transact business independently, you will need to have someone legally authorized to transact business on your behalf. There are essentially two methods of accomplishing this. The first is a guardianship of your estate. This is accomplished through court proceedings. These court proceedings are often very expensive, and result in someone being appointed that is not necessarily the person you want to handle your affairs. The second is the execution, prior to incapacity, of a document known as a Durable Power of Attorney. Today's blog will answer some of the most common questions about the durable power of attorney.
What formalities are required for the proper execution of a Durable Power of Attorney?
The Durable Power of Attorney must be in writing, designate another person as agent, grant authority to the agent to act in your place. The document must be signed by you or in your conscious presence by another adult as directed by you to sign on your behalf. The document must be signed in the presence of any notary public. Finally, the document must contain the statement, "This power of attorney is not affected by subsequent disability or incapacity of the principal" or the statement, "This power of attorney becomes effective on the disability or incapacity of the principal".
Can the Durable Power of Attorney name multiple people to serve simultaneously as agents?
Yes. A principal may designate in a Durable Power of Attorney two or more persons to act as "co-agents". Unless the Durable Power of Attorney otherwise provides, each co-agent may exercise authority independently of the other co-agent.
Can the Durable Power of Attorney name back-up agents?
Yes. The Durable Power of Attorney can list as many back-up (successor) agents to serve in whatever order of priority you deem best. The power of the successor agent becomes effective automatically when the predecessor agent resigns, dies, becomes incapacitated, is not qualified or declines to serve.
Does the agent receive compensation?
The Durable Power of Attorney can specifically provide that the agent does not receive compensation. If such language is not included, the agent is entitled to compensation that is reasonable under the circumstances, and to reimbursement of reasonable out-of-pocket expenses.
The Durable Power of Attorney is an important part of your estate planning. Having this document avoids the stress and cost of a guardianship, and gives you complete control over your affairs during any period of incapacity. The document is fairly simple, and should be prepared by an experienced estate planning attorney. The attorneys of Christiansen Law Firm have extensive experience advising clients on estate planning and preparing Durable Powers of Attorney. For additional information, please contact the estate planning attorneys of Christiansen Law Firm in Houston or San Antonio.