During disability planning, you execute a durable financial power of attorney and name an agent you trust to act on your behalf. This person can make financial and legal decisions and carry out your affairs if you are not able to do so yourself due to incapacity. The document specifically outlines the powers you want to convey to your agent.
You may authorize an agent under a Durable Power of Attorney to:
· buy or sell property (real and/or personal) for you;
· apply for public benefits/government assistance on your behalf;
· manage your business;
· collect your debts;
· invest your money;
· cash your checks; or
· manage your day-to-day financial matters.
Some powers are given only if they are specifically mentioned. Those requiring specific mention include:
· the power to make gifts of your money or other property;
· the power to change your community property agreement; and
· the power to designate beneficiaries of your insurance policies.
Some powers cannot be given to an agent. Those include:
· the power to vote in public elections; and
· the power to make or alter a Will.
The Power to Gift
This power must be specifically conveyed and if done correctly allows your agent to make gifts of money or property to any person or organization on your behalf. Obviously, you must exercise caution to avoid any financial exploitation or gifts that do not line up with your desires. Abusing the power to gift can disrupt an entire estate plan.
On the other hand, it also has its benefits. Your agent can enact a “spend-down” to Medicaid plan or help you qualify for other public assistance. It also continues your charitable giving practices to ensure your intended lasting legacy in this regard. As a safeguard, you can name an independent third party to approve any gifts the agent makes.
The Power to Defend and Prosecute Legal Actions
Conveying this power allows your agent to start, settle, defend, intervene in and appeal a legal action. There are many use cases where this power will be beneficial to you and your bottom line. You can restrict the power to certain types of situations. Some will include a term that prevents the agent from initiating legal action against any family members.
For more information on disability planning, contact the estate planning attorneys at Stouffer Legal in the Greater Baltimore area.You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
