Powers of Attorney
In recent years, the effect of a person’s incapacity on their estate and financial planning has become increasingly more of a concern. Incapacity raises the question of what should be done, or what can be done, when a person becomes unable or unwilling to manage their own personal and financial affairs or becomes incapable of acting rationally and prudently in their own financial best interest. To avoid the expense and burden of going though a formal court hearing for guardianship, a person can do themselves and their family a great favor by executing aDurable Power of Attorney and Healthcare Power of Attorney. When a person does not make advance arrangements for another to handle his or her personal or financial affairs or management of his or her property, it is often too late to start planning because the person may not be competent to sign necessary documents.
Durable General Power of Attorney
In North Carolina, you can sign a Durable General Power of Attorney to appoint someone to handle your assets if you become incapacitated. At a minimum, a power of attorney should include the power to:
- Manage and transfer all assets
- Deal with the IRS
- Make gifts on your behalf
- Create and amend any trusts you set up
You don’t need to transfer any assets at the time you sign a power of attorney, but it’s a good idea to keep the person you’ve chosen informed about your ongoing financial matters.
A Durable General Power of Attorney may be immediately effective or become effective only when the principal becomes incapacitated. You should be very careful in selecting your attorney-in-fact. The person selected does not have to be an expert in investment, accounting, law, and business management. However, the attorney-in-fact should have financial maturity which will result in making logical and prudent decisions, to know when to seek assistance from experts in respective fields, and to know when to delegate. It is also important to select a successor attorney-in-fact in the event the primary attorney-in-fact is unable to serve.
Durable Health Care Power of Attorney
You can also execute a Durable Health Care Power of Attorney so health care decisions can be made for you when you’re unable to do so yourself. This person can provide informed consent for treatment, or even refuse treatment for you.
The Health Care Power of Attorney can become invaluable in the event you become incapacitated or are in a serious medical condition. This document will allow your attorney-in-fact to communicate with you physicians. This document is commonly executed along with a Declaration of a Desire for Natural Death (or Living Will) which dictates what your wishes are in the event you become terminally ill or in a persistent vegetative state.