Written By:Scott Glatstian
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Part of estate planning is understanding how documents take effect and whether any of one’s estate planning documents can expire, especially when it comes to a power of attorney. Prior to discussing expiration dates, it’s worth going over exactly what a power of attorney is.
When most people think of estate planning, they just think of a will, the legal document dictating who and how one’s assets are distributed. But a good estate plan involves more than just a will; most often it will also include documents that deal with incapacitation due to a serious injury or illness – power of attorney and advance directive. The power of attorney is a document that designates an agent chosen by the principal to act on their behalf and make important decisions, such as financial or medical choices.
Not only is it important to choose someone for this role so surviving loved ones aren’t scrambling to do what they think is best (and sometimes leading to arguments), but it’s also important to consider carefully who you’d like to have in this role. You’ll want to consider your options and decide who will execute your wishes appropriately and accurately.
If you don’t have a POA, this means that you won’t have someone to make these important decisions, or take vital actions regarding your finances, like paying a mortgage or keeping a business operating. This can lead to arguments among loved ones debating over who knows you best and what’s the best course of action. Costly and lengthy court appointments to assign a guardian in place of a POA may occur. It’s also important to note that POAs are sometimes needed for reasons other than incapacitation.
What’s the Expiration Date?
Once you’ve written and formalized the POA, it’ll be executed depending on what you write. You might specify based on certain circumstances for a POA to begin and end. So let’s describe some of these common examples:
- Tiffany assigned her POA to her older brother. However, her brother is 15 years her senior, so for her, the best course of action would be to set an expiration date on her POA. She could check on her brother’s capabilities in performing the POA duties later on.
- Andrew is flying out of the country for a few years for a job relocation, but has some assets and other responsibilities he wants to be covered in the U.S. As a result, a POA for only the years he is away would work best for his unique circumstance.
- Ethan is about to assign a close friend to be his POA. But then his friend ends up getting a job offer in a different country, so he will not be able to perform his duties in a year. In this case, Ethan might want to revise his POA to expire and assign a new one once his friend goes abroad, or even assign someone else entirely.
A POA can be springing or immediate. Immediate POAs mean that the person assigned gets those relevant powers as soon as the document is finalized whereas springing POAs “spring into action” once the person becomes incapacitated. This means that a physician has to sign off on the principal’s health status as incapacitated. Most people prefer the immediate POA because it doesn’t involve any waiting time for medical sign-offs.
In some states, banks may enforce the idea of a “stale POA.” This means that they won’t accept a financial POA making decisions if it’s been more than 10 years since the POA was assigned. So if you use an immediate POA, you might have to rewrite it anyways in 10 years. That’s why it’s important to be careful and research thoroughly based on your state and bank policies. With any of these scenarios, you’ll want to prepare backup options too.
How Can I Make Sure My POA Remains Intact?
You can prepare as much as possible, but sometimes unpredicted circumstances occur resulting in your POA expiring. What if you assign your spouse as your POA but then get divorced? Or do you unknowingly have a POA that your bank would consider stale and unusable? Even if your agent named in the POA is the perfect person for the job, what happens if they pass away in an unexpected accident?
These questions are difficult to think about, let alone prepare legally for. To ensure that someone you trust can act as that agent, it’s best to consult an experienced attorney to check that all of your bases are covered in your estate plan. Rosenblum Law has such experienced attorneys that can confirm that your POA is the best choice for your unique circumstances, and prepare for situations if that choice no longer works. Call us at 888-815-3649 for a free consultation.
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How to Cite Rosenblum Law’s Article
Scott Glatstian (Jul 19, 2022). Read This Before Creating Your Will Online. Rosenblum Law Firm, https://rosenblumlaw.com/read-this-before-creating-your-will-online/
Scott Glatstian "Read This Before Creating Your Will Online". Rosenblum Law Firm, Jul 19, 2022. https://rosenblumlaw.com/read-this-before-creating-your-will-online/