A power of attorney (POA) is a legal document where you, the principal, grant an agent the authority to make decisions on your behalf. A POA creates a fiduciary relationship where your agent is bound by law to act in your best interest. You choose the scope of authority given to an agent and you should always take precautions to define this clearly in any POA.Drafting and signing a POA must strictly conform to New York law for your POA to be valid and enforceable.
While a power of attorney has many uses, in the context of estate planning, you appoint someone (your agent) to oversee your finances and assets in the event you become incapacitated or following your death. Your appointed agent is someone you trust and will have the authority to make financial decisions on your behalf.Your agent is acting as your fiduciary and must act in your best interests.
The type and scope of authority you grant to your agent is entirely up to you. However, the authority should be clearly defined in the power of attorney. With a power of attorney, someone may write checks on your behalf to pay your mortgage if you cannot, access funds in bank accounts to pay debts that have accumulated, and buy and sell assets. If you are unable to perform these tasks, you risk losing your house to foreclosure if a mortgage is not paid, getting evicted if you are not paying rent/maintenance, and losing your property.
The power of attorney is an extremely important estate planning tool to consider and must be drafted carefully. Our firm works closely with our clients to ensure they understand their decision in appointing their agent and the scope of authority they are granting that person. In this important process, our clients are as much involved in the drafting and implementing of their power of attorney, along with other estate planning documents, as we are.
The attorneys at James G. Dibbini & Associates, P.C. have over 20 years of experience in Wills, Trusts & Estates.
In order to learn more about the power of attorney and how it may be useful in your estate plan, please feel free to contact us directly.