IS MY POWER OF ATTORNEY POWERFUL ENOUGH?

Betty recently went into a nursing home. Her daughter Samantha, who had Power of Attorney for her, became quite anxious because she did not know what to do or where any of her mom’s “stuff” was. She contacted a local MPS attorney to find out what to do. On arrival to the office, the MPS attorney quickly reviewed the Power of Attorney executed, appointing Samantha. On review, the attorney noted it was a standard Power of Attorney, provided for in the state’s statutes, and used by most attorneys. Unfortunately for Samantha, since it was the statutory Power of Attorney, it did not contain sufficient powers for her to do the necessary planning with him.

While the statutory Power of Attorney did provide authority to deal with the bank, financial institutions, and real estate on Betty’s behalf, it did not provide any authority to create a trust, do asset protection planning, or to authorize Samantha to convey assets to herself. Samantha only has one other sister, and being able to distribute to herself or her sister, is a key part of the plan to protect her mother’s assets.

In addition, the use of trust is another important strategy, but the Power of Attorney does not provide for it. Perhaps the greatest challenge, however, is with the Power of Attorney, in that the agent acting as Power of Attorney virtually is handed a “blank check”. While the Power of Attorney grants Samantha authority to access accounts and deal with legal and financial matters on Betty’s behalf, it does not provide any instructions on how Samantha should exercise her authority.

Samantha intended to exercise her authority as her mom would’ve wished, so she began making decisions, which her sister quickly questioned. Samantha readily explained it was always mom’s wishes to do what she had done, but her sister had a very different perspective on what mom would’ve wanted, and the arguments began.

Samantha asked the MPS attorney what she should do. He identified these arguments were typical, and clarified for Samantha that her sister was not necessarily trying to create fights, but merely had a different perspective of what their mom wanted. The truth is, both kids wanted to do what Betty desired, they just had different perspectives of what it was that she really wanted.

A properly drawn Power of Attorney, with a set of instructions attached, can avoid family feuds, and insure Samantha has all the authority necessary to carry out the wishes of her mother, that are clearly defined. The MPS attorney asked Samantha if Betty was still competent. Samantha indicated she was competent, but had no desire to deal with any legal or financial matters. The MPS attorney quickly stated, “Great”. We will get a new Power of Attorney executed, with all the authority you need, and a sufficient set of instructions on how your mom intends you to use it, and we will meet with her to get the document signed.” Samantha was thrilled. Her sister felt better, as well, and they began to work together to meet mom’s needs.

Do your clients have the standard Power of Attorney? Don’t wait until crises occur to discover its pitfalls. Call MPS to discuss your softwares Power of Attorney, and the ramifications of the provisions it has, or more importantly, fails to have.