A few months ago, I read an article in Greenwich Magazine entitled, “The internet is not your doctor.” The title caught my eye because that is something I have written about for years as it pertains to lawyers. The title could have been, “The internet is not your lawyer.”
In light of the current pandemic situation, some are turning to the internet for “fill-in-the-blank” legal documents to have powers of attorney and health care documents in place. While this may be preferable than no legal documents at all, if the documents are not properly signed and executed, they are invalid.
Early in my legal career, I was Assistant Attorney General to then Attorney General Joe Lieberman. One of my duties was to pursue the return of gifts made to family members by improperly executed powers of attorney. In the majority of cases, fill-in-the-blank documents were used.
A durable power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you (your “agent” or “attorney-in-fact”) if you become incapacitated. Without a power of attorney, your loved ones would not be able to make decisions for you or manage your finances without asking the court to appoint a guardian or conservator, which is an expensive and time-consuming process.
There are many do-it yourself power of attorney forms available. It is a good idea, however, to have an attorney draft the form for you, especially since the law changed as of October 1, 2016. There are many issues to consider and one size does not fit all.
The Agent’s Powers
The power of attorney document sets out the agent’s powers. Powers given to an agent typically include buying or selling property, managing a business, paying debts, investing money, engaging in legal proceedings, borrowing money, cashing checks, and collecting debts. Some powers will not be included unless they are specifically mentioned. This includes the power to make gifts and the power to designate beneficiaries of your insurance policies.
The power to make gifts of your money and property is a particularly important power. If you want to ensure your agent has the authority to do Medicaid planning on your behalf in the event you need to enter a nursing home, then the power of attorney must give the agent the power to modify trusts and make gifts. The wording in a power of attorney can be significant, so it is necessary to consult an attorney.
Executing the Power of Attorney
To be valid, a power of attorney must be executed property. Some states may require a signature, others may require the power of attorney to be notarized and still others may require witnesses. It is important to consult with an estate planning attorney in your state to ensure your power of attorney is executed properly.