A durable power of attorney may save you the process of petitioning the court to have someone appointed as a guardian and conservator.
Why do I say sometimes that I push people — no matter what estate-planning they’re doing — that I push them to have a good durable power of attorney?
Let’s say Bob calls and says my wife Ava needs a durable power of attorney; she needs me to be able to act on her behalf for business, finance and health care. The first thing I’m going to ask Bob is how is Ava’s mental state. How is her capacity, does she know what she’s doing. CAN she sign a durable power of attorney?
And, if the answer is no, if Ava doesn’t have capacity anymore, they are, unfortunately, in a pretty bad spot. Now, lacking capacity, she cannot simply come in to sign a durable power of attorney. She can no longer sign the document that says, I authorize my husband Bob as my power of attorney.
That being the case, his option is now to hire an attorney; he will need to petition the court for a guardianship and conservatorship. He gets to file something saying “I, Bob, am Ava’s husband; she needs help with her affairs. I would like to nominate myself to be the person who takes care of her for business and for healthcare decisions.”
As a spouse, Bob doesn’t really have much special right to act for her. For even simple things like their utilities or to go to the bank or somewhere FOR HER in an official capacity, or to sign Ava’s name, Bob does not have authority.
He can’t qualify to do that just as a spouse. So, he is left to file a Petition with the court, asking that he be a guardian and conservator. Now, he has to send that petition out to close relatives. They have the opportunity to agree or object.
They get to chime in about whether Bob, her husband, is the right person for the job. Spouse or not, Bob’s appointment is subject to their opportunity to object. Moreover, they may even have to have a hearing before the court decides that the husband is the best person to care for his wife.
If the court ultimately appoints Bob, he receives documents showing he has authority to act in this capacity. Hence, he doesn’t just get to take care of his wife now, but he has to show the documents to prove his authority. Also, he then has to annually file a report of the guardian and the annual report of the conservator.
This document provides basically “here is the business I conducted this year on her behalf and here is the status of her health for the year.” Then, the Court either approves or requires more in the report. Moreover, Bob gets to come back next year.
And certainly, this was easily avoided if some time earlier, Bob and Ava had only known to come to an attorney to talk about a durable power of attorney. Yes they could have each signed a single document appointing one another, and maybe one of their children as a backup. With that, they could have been done. No, they would not need a Court blessing. There is nothing to file, no one to object. It is easy to take care of your business that way.
Now, this is not meant to just be a scary story. I guess maybe it is all just to say everyone should have a durable power of attorney. Now, it is not something flashy that you hear a lot about, but it’s an important document.
I hope this helps you out. I’m Dan Covington. You can always find me at Estate Plan Kansas.
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