Serving The Elderly And Their Families Throughout Massachusetts
There is a difference between a general power of attorney and a durable power of attorney.
A durable power of attorney is a document whereby one person appoints another person to act as his or her attorney-in-fact. The person serving need not be an attorney so, to some extent, the term “attorney” is a misnomer. The powers of the person acting on behalf of the other must be specifically set forth in the document.
Powers should be broad enough to include gifting (in case long-term care planning becomes necessary in the future) and should not include gifts to the appointed person, although such gifts may be made perhaps only with the consent of a third party. A durable power of attorney is inexpensive (usually $250 or less) and proceedings remain private.
What To Know About Powers Of Attorney
A general power of attorney is revoked by state law upon disability. A general power of attorney is used commonly in connection with a real estate transaction where either the seller or the buyer does not wish to attend the real estate closing and sends his attorney instead. At the closing, the attorney must certify that the principal is not under any disability. Since a general power of attorney is revoked upon disability, it would not be very effective for use in connection with elder law planning since it is often the event of disability which requires the use of the power of attorney. For this reason, you should use the statutory durable power of attorney.
There are two types of durable powers of attorney; one “takes effect upon disability” and the other will not be affected by a subsequent disability. While the choice is yours, in reality, the power of attorney that becomes effective upon disability (a “springing” power) is not very effective since each time it is used, the attorney/agent must submit evidence of disability.
The power of attorney is a very powerful document and no more than two originals should be signed. These originals are usually retained by the principal or by the lawyer who drafted the originals and should not be distributed indiscriminately.
You may find a financial institution that requires an original power of attorney no later than six months before the date of its use. There is no statutory requirement for this and you should ask for a manager or, if necessary, to be referred to their legal counsel.