Most people think of an estate plan as covering only death. In actuality, it should also cover disability or incapacitation. A durable power of attorney is one element of an estate plan that does so. If you haven’t heard of this term before, then you may be missing an essential protection. Below is an overview of Massachusetts durable power of attorney and its importance in estate planning.
What Is a Durable Power of Attorney?
A durable power of attorney authorizes someone (of your choosing) to make decisions and manage affairs on your behalf. It can apply to specific responsibilities, such as managing your finances or running a business. That person would have the privilege of doing everything that you would normally be doing yourself. A common durable power of attorney would be for finances, to avoid neglect of ongoing financial responsibilities.
Importance of Durable Power of Attorney
To understand why a Massachusetts durable power of attorney is important, let’s consider what would happen if you did not have one. Your family would need to petition the court to assign/authorize someone to manage your finances or make important decisions. Family members might fight over who that person should be. It might not be the person that you would personally select. Since it involves the courts, some of your information would be made public. There would also be court and attorney fees. Avoiding this process would save valuable time and money.
Durable Power of Attorney Requirements
You would naturally choose someone that you trust for a durable power of attorney. However, there are also some legal requirements. In the state of Massachusetts, a durable power of attorney must be granted to a legal adult (18 years of age or older) with the capacity to understand the responsibility. It must also be made in writing, signed, and notarized.
Although you could designate more than one person, it’s often best to make one the primary and the other the backup. This prevent disagreements that might interfere with the execution of their duties. Both the primary and the backup must meet the legal requirements above.
Powers Granted under DPOA
Imagine you were ill for several months and unable to manage your own finances. What might happen during that time frame? Your bills would go unpaid, with accumulating late fees and interest. Utilities might be turned off. Your home could even go into foreclosure. How might this impact both you and your dependents? It’s a scary thought, isn’t it? A durable power of attorney covering finances would allow someone to manage all of this on your behalf. They could review and pay your bills, make deposits and withdrawals from your bank accounts, etc.
A durable power of attorney could be granted for other responsibilities such as managing your business, filing and paying taxes, maintaining your assets (such as real estate investment properties), collecting pensions and other benefits, managing stocks, etc. You could actually assign a durable power of attorney to different people for different responsibilities.
Establishing a Massachusetts Durable Power of Attorney
Since state laws vary, it’s important to have a local attorney prepare your Massachusetts durable power of attorney. This document should fit into your overall estate plan. The specifics depend on your personal circumstances, so there’s really no standard template that you can use. You should consult with an attorney to ensure that the plan and documents in place achieve your personal goals and provide the proper protection and benefits to both you and your dependents.