Durable Power of Attorney
Whether young or old, married or single, a durable power of attorney can be an effective, time saving and cost avoiding document that all persons should consider including in the Estate Plan.
- What is a power of attorney?
A power of attorney is the grant of legal rights
and powers by a person, the “principal,” to another, the “agent” or “attorney-in-fact.” The attorney-in-fact, in effect, stands in the shoes of the principal and acts for him or her on financial and business matters. The attorney-in-fact can do whatever the principal may do—withdraw funds from bank accounts, trade stock, pay bills, cash checks—except as limited in the power of attorney. This does not mean that the attorney-in-fact can just take the principal’s money and run. The attorney-in-fact must use the principal’s finances as the principal would for his or her benefit.
- When does the power of attorney take effect?
Unless the power of attorney is “springing,” it takes effect as soon as it is signed by the principal. A “springing” power of attorney takes effect only when the event described in the instrument itself takes place. Typically, this is the incapacity of the principal as certified by one or more physicians.
- Does the power of attorney take away a principal’s rights?
No, absolutely not. Only a court can take away a principal’s rights in a conservatorship or guardianship proceeding. An attorney-in-fact simply has the power to act along with the principal.
- Can the principal change his or her mind?
Certainly. A principal may revoke a power of attorney at any time. All a principal needs to do is send a letter to his or her attorney-in-fact telling them that their appointment has been revoked. From the moment the attorney-in-fact receives the letter, he or she can no longer act under the power of attorney.
- Can an attorney-in-fact be held liable for his or her actions?
Yes, but only if he or she acts with willful misconduct or gross negligence.
- Can an attorney-in-fact be compensated for his or her work?
Yes, if the principal has agreed to pay the attorney-in-fact. In general, the attorney-in-fact is entitled to “reasonable” compensation for his or her services. However, in most cases, the attorney-in-fact is a family member and does not expect to be paid. If an attorney-in-fact would like to be paid, it is best that he or she discuss this with the principal, agree on a reasonable rate of payment, and put that agreement in writing. That is the only way to avoid misunderstandings in the future.
- What if there is more than one attorney-in-fact?
Depending on the wording of the power of attorney, you may or may not have to act together on all transactions. In most cases, when there are multiple attorneys-in-fact the power of attorney document specifies that they can each act independently of one another. Nevertheless, it is important for them to communicate with one another to make certain that their actions are consistent.
- Can the attorney-in-fact be fired?
Certainly. The principal may revoke the power of attorney at any time. All he or she needs to do is send the attorney-in-fact a letter to this effect. The appointment of a conservator or guardian does not immediately revoke the power of attorney. But the conservator or guardian, like the principal, has the power to revoke the power of attorney.
- What kind of records should the attorney-in-fact keep?
It is very important that the attorney-in-fact keep good records of his or her actions under the power of attorney. That is the best way to be able to answer any questions anyone may raise. The most important rule to keep in mind is not to commingle the funds the attorney-in-fact is managing with his or her own money. Keep the accounts separate. The easiest way to keep records is to run all funds through a checking account. The checks will act as receipts and the checkbook register as a running account.
Want to learn more about Durable Power of Attorney’s? Contact our office to schedule a no-cost consultation to discuss how Powers of Attorney fit into your current Estate Plan.
ons from estate beneficiaries. Eventually, contributions from two beneficiaries and funds from the joint accounts were received and then used to pay federal and state estate taxes and an amount distributable to a beneficiary.
e support is shared among seniors and people with disabilities themselves, family, friends, and volunteer caregivers; communities, state, and federal government,” Alice Rivlin, the former Congressional Budget Office Director and an expert on long-term elder care, testified recently before a House committee. “This shared-responsibility system is severely stressed, and will become increasingly unable to cope as the numbers needing care increase.” Moreover, the rapid growth in this spending is forcing policy makers to make tough budget choices between Medicaid and other spending for the elderly and education and other investments in young people, Rivlin added.
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uandered those dollars through drug abuse, gambling, etc. Even the “best” and “most loving” children are still subject to bankruptcy, divorce, law suits, etc. Sometimes children die before their parents and the parent’s money sometimes does (and sometimes does not) return to the parents. When couples seek to protect their assets, they must 
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Mr. Leonard earned ratings of 5.0 on a scale of 5.0 in all measured categories which included: Legal Knowledge, Analytical Capabilities, Judgment, Communication Ability and Legal Experience. The Areas of Practice that the criteria applied to included Estate Planning.
communities vary enormously in their structure. Some provide life care i.e. an individual may start by living in an apartment, may move to an assisted living wing -where nursing staff is available if necessary and meals may be provided, and intermittently or finally move into the nursing home portion of the community. Many such communities require up-front fees ranging from approximately $25,000 to $900,000 which may or may not be refundable in part or full upon the death of the resident. In addition, there are monthly fees ranging from a few hundred dollars to a few thousand dollars. Frequently, these communities self-insure and guarantee lifetime health care for the residents.
minister medicines, handle emergencies, assist when necessary. Often personal care facilities cost about one half as much as nursing homes. Long term care policies generally pay benefits in assisted living facilities as long as the individual qualifies under the terms of the contract. In Rhode Island there are 
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