In the legal field, a power of attorney can be used to appoint someone to make decisions on your behalf. Within the estate planning niche, durable powers of attorney are often used to account for the possibility of incapacity.
Durable powers of attorney are used because they remain in effect if the grantor becomes incapacitated.
Incapacity is quite common among elder Americans. There are various different causes of incapacity, some of them physical, and some of them mental. Alzheimer’s disease is a major culprit when it comes to mental incapacitation, and the statistics surrounding the disease are attention-getting to say the least.
Approximately 12.5 percent of people who have achieved senior citizen status are suffering from Alzheimer’s disease. The likelihood of contracting the disease increases as you get older. Around 40 percent of the oldest old (people age 85 or older) have Alzheimer’s disease.
When you have Alzheimer’s disease, you invariably will suffer from dementia. Those with dementia typically become unable to handle their own affairs.
You can account for the possibility of incapacity late in your life by executing durable powers of attorney. With these documents you name agents to act on your behalf in the event of your incapacitation. It should be noted that the agent is alternately referred to as an attorney-in-fact.
Who Can Act as Agent?
Now that we have provided the necessary background information, we can answer the question that serves as the title of this post. Because the agent is alternately referred to as an attorney-in-fact, you may assume that the agent must be a lawyer. In reality, this is not the case.
Any adult who is of sound mind can act as an agent under a power of attorney. However, the person who is named as an agent must be willing to act in this capacity. You cannot force someone to act as an agent.
Though anyone can act as an agent, there are certain qualities that you should look for when you are empowering someone to make decisions on your behalf in the event of your incapacitation.
It is wise to have durable powers of attorney in place when you are still a relatively young adult, because you don’t know what the future holds. The agent may not be called upon to act until you are much older. You should take this into consideration when you are naming an agent. Will the agent still be alive and well when you’re a senior citizen?
When you are creating a durable financial power of attorney, you want to name an agent who has a good bit of financial acumen. People typically execute another power of attorney for health care decision-making. You should make sure that your health care agent understands your thinking with regard to medical procedures.
These are a few things to consider. If you would like to discuss incapacity planning with a licensed estate planning attorney, contact us to schedule a free consultation.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.