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Home Our Blog When Does a Power of Attorney Become Effective?

When Does a Power of Attorney Become Effective?

By Barry Zimmer on March 20th, 2014 in Estate Planning, Estate Planninng, Incapacity Planning

A power of attorney is a legally binding document that is used to empower someone to act on your behalf. There are many different reasons why you may want to execute a power of attorney.

From an estate planning standpoint, powers of attorney are often used to account for the possibility of incapacity later in life.

Incapacity Planning

A surprising high percentage of senior citizens will eventually become unable to handle all of their own affairs. There are numerous causes of incapacity, but the biggest culprit is Alzheimer’s disease.

Over 10 percent of all senior citizens suffer from Alzheimer’s disease. Approximately 45 percent of those 85 and up have contracted Alzheimer’s.

Who would handle your affairs if you were to become unable to make sound decisions? You can answer this question yourself by executing a durable power of attorney.

Durable Power of Attorney

The typical incapacity plan will include a document called a durable power of attorney. With this legal document, you name an agent or attorney-in-fact who can act on your behalf in the event of your incapacitation.

Because the device is durable, it remains in effect even if you become incapacitated. A power of attorney that is not designated as durable becomes ineffective upon the incapacitation of the grantor.

When Does It Become Active?

When you execute a durable power of attorney, it is typically going to become effective immediately. (Though you could technically create a power of attorney that became effective on a particular date.)

If you do not want to give your agent the ability to act on your behalf immediately, you could potentially execute a springing durable power of attorney.  A springing durable power of attorney would not become effective right away. Instead, it would “spring” into effect and become activated if and when you become incapacitated.

Avoiding a Guardianship Proceeding

Every comprehensive estate plan should include an incapacity component. If you do not execute a durable power of attorney, the state could be petitioned to appoint a guardian to act on your behalf.

When you execute a durable power of attorney, you take the matter into your own hands by selecting your own representative. When you do nothing, you leave your fate in the hands of the state.

Incapacity Planning Consultation

Contact us to schedule a consultation if you would like to learn more about incapacity planning, guardianship, and durable powers of attorney. You can reach us by phone at (513) 721-1513, and you can also send us a message through this website.

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