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Power of Attorney: Pros and Cons (Part 2 of 2)

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In part one of this series, we looked at the two basic types of power of attorney, the general and limited POAs – and examined the pros and cons of each. In this presentation, we’ll go beyond that and examine the advantages and disadvantages of the Durable Power of Attorney. Learn more about durable power of attorney in this presentation.

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Power of Attorney: Pros and Cons (Part 2 of 2)

  1. 1. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 POWER OF ATTORNEY: PROS AND CONS (PART 2 OF 2)
  2. 2. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 In part one of this series, we looked at the two basic types of power of attorney, the general and limited POAs – and examined the pros and cons of each.
  3. 3. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 In this presentation, we’ll go beyond that and examine the advantages and disadvantages of the Durable Power of Attorney.
  4. 4. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 A durable power of attorney grants your chosen attorney-in-fact the ability to act in your stead in all matters outlined in the empowering document.
  5. 5. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 You can make those powers broad or limited, much as you would with the general or limited power of attorney. With the durable power of attorney,
  6. 6. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 however, the power to act is present as soon as the document is executed, and can continue even if you are incapacitated. This offers many advantages, and a few disadvantages as well.
  7. 7. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 If you lost mental capacity tomorrow, who would manage your finances to ensure that your family, business, and other important concerns were properly cared for?
  8. 8. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 Without a POA, it would be up to a court to appoint a conservator to manage your affairs.
  9. 9. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 Conservatorships can be expensive, time- consuming, and stressful.
  10. 10. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 The durable power of attorney provides a less expensive solution that avoids those costs and enables your family to avoid delays that might force their financial needs to go unmet.
  11. 11. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 You can not only name your attorney-in-fact, but you can also provide that agent with as much or as little power as you desire, to accomplish your specific goals.
  12. 12. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 That can enable you to craft a POA that perfectly meets your unique needs.
  13. 13. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 Because your POA is not subject to court supervision, you can keep your finances and other personal information out of the public eye.
  14. 14. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 That’s not true with a conservatorship, since conservators must be publicly accountable for their actions and often need court approval for certain actions.
  15. 15. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 There are some third-parties such as the IRS that have very specific POA requirements.
  16. 16. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 You should consult with an attorney to ensure that your documents will meet all your needs.
  17. 17. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 No matter how trustworthy you might believe your attorney-in-fact to be, he or she could still act inappropriately.
  18. 18. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 It is difficult to prevent that abuse with the terms of the POA, since any limitations need to be carefully crafted to avoid denying the agent power that you need him or her to exercise.
  19. 19. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 When attorneys-in-fact misuse their power, there is no immediate check on their actions.
  20. 20. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 Since no court oversees the agent’s activities, families typically don’t learn about serious abuses right away.
  21. 21. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 Often, misuse of assets is not discovered until large portions of an estate have been squandered.
  22. 22. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 Again, without any formal oversight, agents can sometimes make mistakes that can come at great cost.
  23. 23. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 Your family could request a court hearing to force the agent to account for his or her actions, but by then it may be too late to recover from the most serious lapses in judgment.
  24. 24. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100
  25. 25. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 At Frank & Kraft, Attorneys at Law, out estate planning and elder law experts are here to guide you through all the power of attorney pros and cons and help you make the right decision for your incapacity planning needs.
  26. 26. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100 To learn more about how the POA could help you, contact us online or call (317) 684-1100 today!
  27. 27. 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN, 46204-2485 Phone: (317) 684-1100

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