A couple of days ago I wrote about a special needs trust mechanism provided for by law. While it primarily is an estate planning tool, it certainly falls into the realm of family law as well. Today’s post is about another such estate planning tool that you should be able to obtain from any family lawyer: the durable power of attorney.
Many attorneys will create a power of attorney for their clients, but they actually require some specific language that not all attorneys familiar with these requirements. For example, a grant of a power of attorney, which is a contractual arrangement, fails or becomes void when the grantor becomes incapacitated. This does nothing to help with estate planning where there is a likelihood of incapacity of an elderly family member. Therefore, one needs a “durable power of attorney” which has language that states that it will endure despite incapacity or the passage of time.
A power of attorney also must contain specific grants of power rather than just a general one. For estate planning purposes and to take advantage of maximum gifting exempt from estate and gift taxation, a durable power of attorney must specifically state that the grantee can make gifts of the grantor’s property. There are many other considerations that come into play with that “simple” old power of attorney, so it is best to consult a lawyer knowledgeable in this area.