What’s the difference between a General vs. Durable Power of Attorney? A general power of attorney is no longer effective when the principal becomes incompetent. However, a general durable power of attorney will remain in effect, according to Caroline Daiker of Beck, Lenox & Stolzer Estate Planning and Elder Law, LLC, LLC.
FedWeek’s recent article entitled “When a Durable Power of Attorney Might Be Preferred” explains that many states allow powers of attorney to be “springing.” These powers are executed today but don’t become effective until later, when some specified event occurs, like when the principal’s physician states in writing that the principal has become incapacitated.
Springing powers add an additional level of uncertainty at a time when clarity will be needed. Some doctors also won’t want to go on record that someone is incapacitated, because of their potential liability.
A principal with beginning dementia may go in and out of incapacity, which also raises questions about the application of a springing power.
Visit an experienced estate planning attorney to discuss impact of a general vs. durable power of attorney. After you have a power of attorney drawn up, signed, and witnessed, you should file copies with the financial institutions where you do business.
Make certain that your bank or brokerage firm will accept your power of attorney.
If there’s a problem, and you know in advance, you can work with the institution to make sure that the document will be honored.
Many financial institutions also have their own power of attorney forms they prefer to be used. They may not accept one drafted by your estate planning attorney.
A power of attorney technically lasts forever. However, in reality, if the document looks to be stale, a financial institution may have issues with it.
As a result, a power of attorney should be reviewed every five years or so with an experienced estate planning attorney. The attorneys at Beck, Lenox & Stolzer offer complimentary reviews.
If there’s been a change in your circumstances, depending upon what it is, you may want to modify the document. If you only have a general power of attorney, now would be a good time to discuss the pros and cons of a general vs. durable power of attorney.
Here is information from our website on Estate Planning. You will see that we only mention durable powers of attorney; it is what we recommend. https://beckelderlaw.com/estate-planning/
Reference: FedWeek (April 15, 2021) “When a Durable Power of Attorney Might Be Preferred”