Apollo 11 astronaut Buzz Aldrin is suing his two children and his business manager for improperly taking control of his finances, using his funds for their own benefit, and defaming him by stating publicly that he suffers from dementia. This lawsuit was brought in response to a guardianship application commenced by Aldrin’s two children.
Regardless of how this story unfolds, it is a compelling reminder of the importance of estate planning, and especially the importance of planning for potential future incapacity.
A Continuing Power of Attorney for Property enables a person to select who he/she wants to manage his/her property in the event of incapacity. An alternative – if a person becomes incapable without having prepared a Power of Attorney – is a guardianship application, which may be expensive, may embroil family and friends in litigation, and may result in an outcome which the incapable person would not have wanted.
While a Continuing Power of Attorney for Property is an excellent planning tool, there is also a risk of misuse. The obvious concern is that the person named as attorney will misuse the document for personal financial gain. Therefore, think carefully about who you name as your attorney and consider whether, in your circumstances, having multiple attorneys are better than having only one. The other matter to consider is that unless the Power of Attorney states otherwise, it becomes effective as of the date it is signed. This creates open the possibility that once the named attorney has possession of the document, he/she can start acting on your behalf, regardless of whether you are capable or incapable. One solution, which is offered by many law firms, is for the firm to safely store the Power of, and prepare a written direction for the client to sign setting out specific terms and conditions governing when and to whom the Power of Attorney may be released.
A Continuing Power of Attorney for Property can be an excellent estate planning tool, but it also bears risk of misuse. It is recommended that you consult with a lawyer if you wish to prepare a will or powers of attorney for property or personal care.