Question: Why do I need a Power of Attorney? Can I just use the Power of Attorney form provided by my bank?
Answer: A Durable Power of Attorney is a document that allows your named agents to make financial decisions on your behalf and assist in taking care of your daily financial obligations. This document will be practical should you become incapacitated or if you are not able to handle your accounts or assets at any time. New York has adopted a statutory Power of Attorney form with detailed requirements for it to be considered valid in the state. While the statutory form or the form provided by the bank may be accepted by certain institutions, it is typically not sufficient to convey all the powers needed to a client. Not all power of attorneys are the same. A good Elder Law attorney will make numerous modifications to the statutory form.
The form provided by your bank is likely valid, however it will only authorize the named agents to act with regard to that specific bank and possibly only on a specifically designated account at that bank. Additionally, the law regulating Powers of Attorney states that if a power is not specifically listed in the document itself that the agent does not have that power. As Elder Law attorneys we have added a list of powers that may be necessary to assist with long term care planning and the Medicaid application process. This could include the creation, funding, amending or termination of trusts, or gifts to the principal’s loved ones. The agent named in your Power of Attorney can also play an important role in the Medicaid application process since your agents will be able to assist in obtaining the documentation needed.
If you do not have a Power of Attorney or if you have a power of attorney without the necessary powers, the only alternative would be for a relative or some other interested party to petition the court to be appointed as your guardian with the powers needed to insure your safety and protect your assets. The guardianship court process can be costly, time consuming, and invasive into your family affairs. The appointed guardian also must comply with the court’s annual reporting requirements, meaning the court will continue to be involved in your affairs. Therefore, it is crucial that you name an agent under a well drafted Power of Attorney while you have capacity. In fact, the need for a power of attorney is not limited to seniors. Everyone that has attained the age of 18 should have a power of attorney for financial decisions and a health care proxy for health care decisions.
For these reasons it is important to plan early and have a comprehensive Power of Attorney document. As a result of our experience, the document our office will prepare includes the powers we have seen our clients need throughout our years of practice.
– Elaine Siegmund, Esq. and Nancy Burner, Esq.