If you have begun the estate planning process, you have likely heard the term “durable power of attorney.” This refers to powerful contracts that allow you to select a trusted person (or persons) to act on your behalf and make financial and legal decisions for you.
The agent, as this person is legally known, can be anyone you trust, and you can select successor agents.
Successor agents can take over for your primary or first-choice agent, should they not want the power, choose not to act as your agent or for any other reason cannot or will not serve as your agent.
Why are they important?
POAs are needed by every adult for multiple reasons.
First, should you become incapacitated, you need someone to make financial and legal decisions on your behalf. Without a POA, anyone who needs to act on your behalf may need a court order.
Even some utility companies will not allow anyone other than the account holder to pay, which means without a POA, no one can pay those bills if you become incapacitated.
Imagine being in a car accident, falling into a coma and waking up to find out that the bank foreclosed on your Brooklyn apartment because it would not accept payment from anyone other than you or your POA agent.
POAs can also be used to empower a trusted agent to make healthcare decisions on your behalf.
This is known as a healthcare proxy, and this type of arrangement can be especially important should you become incapacitated due to age (dementia, Alzheimer’s, etc.) or any other reason.
This person can make sure that your healthcare wishes are honored, but if you wait, you may lose the ability to make your wishes known.
New York law
The general and most effective New York POA is a durable power of attorney. Once signed, it is effective that day, but the agent is only empowered after you die or become incapacitated. You can even make it terminate automatically.
Powers to include
The powers that you include are up to you. You can give them broad powers or only specified powers. You can even empower multiple agents with different powers.
You can authorize your agents to make gifts on your behalf, make payments, run your business and make any other financial decision.