Power of Attorney in case of Disability

Power of Attorney- What to explain and discuss with the client

By Kenneth Vercammen, Esq of Edison, NJ
    The ABA GP Solo Division  published Ken Vercammen’s 3rd book “Wills and Estate Administration”. This is a chapter of the book. The book is available at
http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=224827061
 A Power of Attorney is a written document in which a competent adult individual (the "principal") appoints another competent adult individual (the "attorney-in-fact") to act on the principal's behalf. In general, an attorney-in-fact may perform any legal function or task, which the principal has a legal right to do for him/herself. You may wish to sign a Power of Attorney giving your spouse, children or partner the power to handle your affairs if you become ill or disabled.  More info at http://www.njlaws.com/power_of_attorney.htm
       An important part of lifetime planning is the Power of Attorney. Valid in all states, these documents give one or more persons the power to act on your behalf. The power may be limited to a particular activity (e.g., closing the sale of your home) or general in its application, empowering one or more persons to act on your behalf in a variety of situations. It may take effective immediately or only upon the occurrence of a future event (e.g., a determination that you are unable to act for yourself). The latter are "springing" Powers of Attorney. It may give temporary or continuous, permanent authority to act on your behalf. A power of attorney may be revoked, but most states require written notice of revocation to the person named to act for you. See
http://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/power_of_attorney.html
Reasons to sign a Power of Attorney
A Power of Attorney allows your spouse or another person to administer your assets during your lifetime, either upon disability or now.  The lack of a properly prepared and executed Power of Attorney can cause extreme difficulties when an individual is stricken with severe illness or injury rendering him/her unable to make decisions or manage financial and medical affairs.
 More info at http://www.njlaws.com/power_of_attorney.html
In the absence of a Power of Attorney or other legal arrangement to distribute property if you become disabled, your family or partner cannot pay your bills or handle your assets. The result can be lengthy delays.
The term "durable" in reference to a power of attorney means that the power remains in force for the lifetime of the principal, even if he/she becomes mentally incapacitated. A principal may cancel a power of attorney at any time for any reason. Powers granted on a power of attorney document can be very broad or very narrow in accordance with the needs of the principal.

New Jersey has a detailed, expensive legal procedures, called Guardianships or conservatorships, to provide for appointment of a Guardian. These normally require lengthy, formal proceedings and are expensive in court. This means involvement of lawyers to prepare and file the necessary papers and doctors to provide medical testimony regarding the mental incapacity of the subject of the action.
The procedures also require the involvement of a temporary guardian to investigate, even intercede, in surrogate proceedings. This can be slow, costly, and very frustrating.   Advance preparation of the Power of Attorney could avoid the inconvenience and expense of guardianship proceedings. This needs to be done while the principal is competent, alert and aware of the consequences of his / her decision. Once a serious problem occurs, it is usually too late.  
The Power of Attorney can be effective immediately upon signing or only upon disability.
Most people who give a Power of Attorney to someone else do it with the thought that if they should become ill or incapacitated or if they should travel, the Power of Attorney will permit the holder of it to pay their bills and to handle all of their affairs for them as limited in the Power of Attorney.