There are various different legal devices in the state of Indiana that are used in the field of estate planning. One of them is the power of attorney. In this post we would like to examine powers of attorney so that we can clear up any confusion that may exist.
A power of attorney in Indianapolis Indiana is used to give someone else the right to act in your behalf in a legally binding manner. There are different types of powers of attorney, and they are each used for different purposes.
A power of attorney is comprised of a grantor or principal and an agent or attorney-in-fact. If you are creating a power of attorney you are the grantor or principal. The individual that you select to make decisions in your behalf is the agent or attorney-in-fact.
When you see the term “attorney-in-fact” it may conjure certain images. Your attorney-in-fact does not have to be a lawyer, and if the agent is not a licensed attorney he or she may not practice law.
With a general power of attorney you are giving sweeping decision-making power to the attorney-in-fact. He or she may make act in your behalf in a comprehensive manner.
There are also special or limited powers of attorney. They provide the attorney-in-fact with the ability to act in your behalf on a limited basis. To provide an example, let’s say that your sister lives in California and you live here in Indianapolis. You are conducting a real estate transaction in California just a few miles from where your sister resides.
Because of your busy schedule you can’t make it out to California to sign the papers. If these circumstances were to exist you could work with your attorney to execute a limited power of attorney that gives your sister the authority to consummate the real estate transaction in your behalf.
Incapacity Planning and Durable Powers of Attorney
When you are planning your estate you should consider the period of time that will precede your death. It is quite possible that you will go through a period of incapacitation. To account for this possibility you can select potential decision-makers through the execution of durable powers of attorney.
Powers of attorney that do not carry the durable designation would not remain in effect upon the incapacitation of the grantor. Durable powers of attorney do remain in effect even if the principal becomes incapacitated. This is why they are used by estate planning attorneys who are assisting clients as they develop an incapacity plan.
Springing durable powers of attorney are also available. These durable powers of attorney only become operative if the principal does in fact become incapacitated. If you execute a non-springing durable power of attorney it would go into effect immediately
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.