There have been several stories in the news recently about famous people who were swindled by family members.  For example, both actor Mickey Rooney and famed socialite Brooke Astor fell victim to financial abuse by family members or trusted advisors.  These stories make some of my clients a bit nervous about signing a durable Power of Attorney.   It is true that a durable Power of Attorney is a powerful document that could be used to take advantage of someone.  Even still, for most individuals the decision to create a durable Power of Attorney as part of their estate plan is a better choice than not creating one.

A Power of Attorney is a legal document in which ‘the principal’ (the person who makes the Power of Attorney) appoints another person as his ‘Attorney-in-fact.’  The reason to create a Durable Power of Attorney is so that your Attorney-in-fact can pay your bills, sign your tax return, invest your money, file an insurance claim, etc. in the event you are not able to do so.  If you become incapacitated and you do not have a Durable Power of Attorney, then a guardian and/or conservator will need to be appointed by the court to take care of your affairs.  That process is usually time consuming, expensive and stressful, and there is no guaranty that the court will appoint the person you would have chosen.

While it can be worrisome to think about giving another person so much authority over your affairs, for most people, creating a Durable Power of Attorney naming a family member or trusted friend or advisor is a better option than a guardianship or conservatorship through the probate court.  An experienced estate planning attorney can answer your questions and help you make decisions that are right for you given your particular situation.

To learn more about Powers of Attorney read my article, Five Important Facts to Know About Powers of Attorney.

Published November, 2013