Power of legal professional for my disabled dad and mom – what choices do we now have? | Burns & Levinson LLP
A sensitive and often complicated conversation that individuals have with their aging parents is about protective measures in the event of the parents’ incapacity for work. A power of attorney and its variants for submitting the financial control require a well thought-out discussion. During these conversations, it is important to remember that your parents’ sense of autonomy is valued and respected. A power of attorney is a document that is intended to protect the loss of decision-making ability in the event of future legal incapacity. A power of attorney can also help avoid costly and public judicial proceedings with guardianship and custodial relationships in the future.
A power of attorney is a written document that appoints an “attorney” for a specific purpose, typically relating to financial matters. The person for whom the proxy is acting is the “client” or, in this case, your parent. The document establishes a representation relationship between the authorized representative (agent) and the client. The document itself defines all the powers and duties of the agent and can be defined as broadly or restricted as the client wishes. Examples of powers include the power to fund or modify a revocable trust; Authority to buy and sell real estate; Authority to invest or reinvest the client’s money; Contract authority; Authority to conduct business owned by the client; Powers over retirement plans or other employee benefits; Powers over bank accounts; and many more. The document must be signed at a time when the principal is legally competent and the document is usually included in general estate planning plans. There is no legal obligation to certify authorized representatives; However, it is advisable to have two competent adults testify to the execution and have the document signed. In addition, the document should be certified under seal or notarized. Powers of attorney usually take effect when they are signed.
A variant of a power of attorney is a permanent power of attorney. A permanent power of attorney is just that: it is permanent. The powers remain in effect if the principal is incapable of working or become effective if the principal becomes incapable of working or is legally incapable of doing so. The permanent aspect of a power of attorney is of crucial importance as the powers of attorney remain valid if necessary after the legal incapacity. The Massachusetts Uniform Probate Code, GL c. 190B replaces previous laws on permanent powers. The relevant sections entitled “Permanent Powers of Attorney” can be found in Sections 5-501 to 5-507. The relevant laws require that the letter that creates this permanent power of attorney contains this sentence (or something similar): “This power of attorney is not affected by later hindrance or incapacity for work of the principal or by the passage of time.” In documents establishing a permanent power of attorney, the principal can also name the person he appoints as guardian or supervisor. This appeals to those who are afraid of losing control and allows the school principal to choose his or her guardian if one is ever needed. This designation closes the door to future litigation before the probate court, where the decision would be left to disgruntled family members or the court.
Another variant of a power of attorney is a “springing” power of attorney. These documents usually state that the power of attorney will only take effect in the future, for example if the principal is mentally or physically disabled. This can be a good option for a parent who is reluctant to give their representative immediate power of attorney. This also gives your parents the option of relinquishing control only when absolutely necessary. These types of spring forces have to be permanent because they have to survive the inability of the client. Problems can arise with this type of power of attorney as the “jumping” usually requires evidence of an event. For example, if the power of attorney does not take effect until mom or dad is unable to work, a letter from your doctor may be required. Understanding your parents’ concerns is important, and if they are having difficulty placing great trust in their agent from the start, a bounce may be in order.
If your parents ask if the power of attorney is forever, they have a few options. A power of attorney expires, if it is not permanent, if the principal is prevented from doing so. In any case, all powers of attorney expire with the death of the principal. Power of attorney can also be revoked at any time by the principal, provided that he is authorized to do so. As a rule, a written document stating the revocation is required, which is sent to the authorized representative. If you decide to issue a subsequent power of attorney, it should be expressly stated that it replaces all previously executed powers of attorney.
When speaking with your parents, it is important to emphasize that by introducing such safeguards, they are now deciding who can act on their behalf and with what specific powers. Power of attorney documents provide orientation about the preferences of your parents and provide information about what wishes they have if they can no longer communicate. Without such prior planning, your parents will place that decision in the hands of the court.