A Guide for Elders: Planning That Protects You and Your Assets, Chapter 2 WHY DO I NEED A POWER OF ATTORNEY DOCUMENT?    WHAT IS A POWER OF ATTORNEY DOCUMENT? A power of attorney document is a written document by which you (the Principal) give or grant to an “Attorney in Fact” (or Agent) of your choice the legal authority to manage your financial, personal, or other affairs in the event that you become incapacitated, or are otherwise unable to handle those affairs yourself. In a durable power of attorney document, your agent — the person whom you have chosen to manage your affairs when and if you cannot — is known officially as your “Attorney in Fact,” even though that person does not have to be, and probably will not be, a lawyer. A licensed, practicing lawyer is known as an “Attorney at Law.” Any other person whom you authorize to do business for you is known as your “Attorney in Fact.” The power or authority granted may be as narrow or as broad as you, the Principal, deem necessary or appropriate. Your power of attorney document can, for example, authorize your agent to sign one document or make withdrawals from one bank account. On the other hand, it may authorize your Agent to handle all of your affairs, with the same authority or in the same manner as you could. DO I NEED TO NOTARIZE THE DOCUMENT? Although it is not a legal requirement that your power of attorney document be notarized, it is always a good idea to take such measures in order to provide additional protection for you and the Agent. A notarized power of attorney document is more likely to be honored by the persons with whom the Agent must deal on your behalf. WHO SHOULD I NAME AS MY AGENT? The power of attorney can be given to any person you choose: a family member, a trusted friend, an advisor, an accountant, an attorney, or trustee. In short, you can name anyone, but you should choose a person whom you trust, one who will conduct your financial, personal, and legal affairs in accordance with your wishes. WHAT ARE THE DIFFERENT TYPES OF POWER OF ATTORNEY DOCUMENTS? There are two basic types of power of attorney documents, each designed to accomplish different purposes: THE CONVENTIONAL POWER OF ATTORNEY DOCUMENT This power of attorney document is designed to give temporary authority to the Agent to manage the Principal’s financial affairs, or to exercise limited authority with respect to specific tasks, for example, to sign a deed. Such a power of attorney document grants authority that terminates (1) at the incapacity or death of the Principal, (2) when the Principal revokes it, or (3) when it expires by its own terms. For an example of the conventional power of attorney document, see the form following this chapter. THE DURABLE POWER OF ATTORNEY DOCUMENT The durable power of attorney document also grants general or specific authority to the Agent, but it is “durable” in the sense that it survives, or continues to be in effect after, the incapacity (defined as mental illness or other disability recognized under the General Laws) of the Principal. It can do that only if the document contains language that specifies that it will survive the incapacity of the Principal. You may sign a durable power of attorney document, which gives authority to the Agent as of the date that you sign it, or you can sign a “springing” power of attorney document, which springs into action or effect only if and when you, the Principal, become mentally incapacitated. WHEN SHOULD I SIGN A DURABLE POWER OF ATTORNEY DOCUMENT? In order to ensure that your affairs will be managed by someone you trust, in the event that you should become incapacitated, you should sign such a document while you are in good health. It can never be too soon. Consider the scenario of Mrs. Adams: Mrs. Adams is a seventy-eight year old widow. She owns a two-family home in Dorchester, a cottage in Hyannis, three bank accounts, stock in General Electric, NYNEX, and the New England Patriots. She drives her own car, and regularly visits her older sister, Edna, who lives in Salem, New Hampshire. Mrs. Adams also visits regularly with her daughter and grandchildren who live in nearby Quincy. Unfortunately, Mrs. Adams has been involved in a very serious automobile accident, as a result of which she is now incapacitated and unable to communicate. She has made no provision for the managing of her financial, personal or medical affairs. It will be necessary for her family to file an action in court in order to secure authority to manage her affairs. Such action can be costly and time consuming. Until someone is appointed by the Court, Mrs. Adams’ affairs are at a standstill, no bills are being paid, and no decisions are being made.  HOW COULD THIS PROBLEM HAVE BEEN AVOIDED? A durable power of attorney in place at the time of Mrs. Adams’ accident would have permitted her Agent to “step into her shoes” and manage her affairs until she recovered. WHAT SHOULD I CONSIDER IN DECIDING ABOUT CREATING A DURABLE POWER OF ATTORNEY DOCUMENT? Remember that this is an important legal document, giving another person authority, which you now have, over your own affairs. So, you should decide:  1. Who should serve as your Agent.  2. Whether you want to grant authority now, or when you become incapacitated.  3. Whether you want to give your Agent broad authority or to narrow that authority to specific tasks or responsibilities.  4. Whether you want to set a time limit on the authority of your Agent.  HOW DO I CREATE A POWER OF ATTORNEY DOCUMENT? It is recommended that you get expert advice in preparing the power of attorney document that you sign. Decide who is to serve as your Agent, what authority you wish to grant, and when the authority is to become effective. Examples of durable power of attorney documents are found after this chapter. You should get your power of attorney document notarized, keep it, or copies of it, in a safe place, and give your Agent a copy, so that everyone involved is aware of your decision. Your agent may even need the original of the document in order to conduct business for you. IF I CHANGE MY MIND, CAN I “UNDO” A POWER OF ATTORNEY DOCUMENT? Yes, the power of attorney document can be changed, amended, or revoked at any time you wish. If you decide to make a change or revoke your power of attorney document, you should instruct the Agent to return all copies of it to you. In addition, you should notify all persons or entities (for example, banks, stockbrokers, etc.) who may have any dealings with your Agent of change, amendment, or revocation. The revocation must be in writing, and should be sent to all parties with whom the Agent may have contact on your behalf. An example of a written revocation of a power of attorney document is given after this chapter. WHAT IF MY AGENT VIOLATES THE TRUST I GRANTED? Your agent is a “fiduciary,” which means that a very high standard of conduct is applied to any actions taken by that person under the authority granted by a Power of Attorney. An Agent is supposed to manage your affairs and property with the utmost honesty, and you can sue an Agent who violates that trust. Prevention is better than the cure, so choose your Agent carefully and wisely. ARE THERE ALTERNATIVES TO A DURABLE POWER OF ATTORNEY DOCUMENT? Yes, you can make other arrangements for a trusted person to gain access to your assets, and thus be able to manage them, if you cannot. Such arrangements, however, are usually not as effective as a durable power of attorney document. Take the case of Mrs. Adams. She could have put her daughter’s name on her bank accounts, or her stock certificates, or her real estate. Such joint ownership would have enabled her daughter to access those assets, but this approach may create disputes over whether Mrs. Adams intended to make a gift to her daughter, or intended simply to make it easier, or more convenient, for her daughter to manage her affairs in the event of her incapacity. With the help of counsel, Mrs. Adams could have created a trust, but that is more complicated (and expensive) than a grant of authority under a durable power of attorney document. HOW CAN I LEARN MORE ABOUT DURABLE POWER OF ATTORNEY DOCUMENTS? You should consult with an attorney who is an expert in elder law if you decide that you want to create a durable power of attorney document. If you want more information to help you decide, you can go to your public library and read Chapter 201B of the Massachusetts General Laws. If you do not have an attorney, you may contact your local bar association, which may have a bar referral program, or the Massachusetts Bar Association Referral Service at (617) 542-9103. You may also contact the Massachusetts Chapter of the National Academy of Elder Law Attorneys at (617) 762-0077. Your local Council on Aging may also be able to help. Call the Executive Office of Elder Affairs at 1-800-882-2003 (or, for the hearing-impaired, call 1-800-872-0166) to obtain their number or check your city or town telephone directory. Chapter 2 Exhibits Conventional Power of Attorney Durable Power of Attorney Page 2 -- Durable Power of Attorney Page 2 -- Springing Power of Attorney Notice of Revocation of Power of Attorney Open Chapter 2 exhibits Back to start of Chapter 2 Back to Table of Contents of A Guide for Elders On to Chapter 3