A durable power of attorney is the legal document that grants power to your agent to handle your legal and financial responsibilities when you cannot. Many people are familiar with the concept of utilizing a power of attorney for instances that occur during their lifetime. This could include allowing an agent, such as a spouse, to sign the contract for a new house if you, the principal, were out of town.
What most of us are less familiar with, however, is the role your agent will play should you become incapacitated. It is crucial that you look beyond day-to-day transactions in your document. You need to plan well into the future to ensure your agent under your durable power of attorney is able to manage your elder law concerns.
Elder law, and thereby planning for long-term care, is a relatively new concept. In most powers of attorney that are over seven years old, you will not find mention of elder law planning techniques. To be effective today, however, a power of attorney must be extremely detailed and must specify exact provisions, or powers, within the document that allow the agent to make elder law decisions. These key provisions often involve the transfer or restructuring of your assets to ensure you or your family will not be bankrupted by long-term care costs.
The power to plan for long-term care is crucial for the success of this document and to ensure your family is protected. If you become incapacitated due to age, illness or disability, and no longer are able to make long-term care decisions for yourself, you need to have given specific power and authority to your agent. These provisions may include speaking to your financial planner about your finances, creating financial gifts to family members on your behalf, paying for someone to care for you in your home and the authority to apply for benefits that will help you pay for the cost of a nursing home.
Without key provisions like these, your agent will not be able to help you with any elder law concerns. Do not be lulled into a false sense of security by a durable power of attorney that does not have key elder law provisions. Instead, contact us to discuss your durable power of attorney needs as a part of your comprehensive New York estate plan.