A durable power of attorney is quite handy in enabling a person to manage the principal's estate in the event of the principal's incapacity without the need for the commencement of a cumbersome court supervised guardianship. Most states also permit the principal to nominate a guardian for his or her estate in his or her durable power of attorney, if the need for such a guardian should arise, such as the named attorney dying or becoming incompetent. This designation could help avoid uncomfortable situations where the need for a guardianship does arise and several family members battle for the right to be guardian.
A durable power of attorney can be quite broad and extend to a wide range of subjects. Each state has its own statutory regime relating to the form, content and effectiveness of a power of attorney and state rules are generally strongly influenced by the Uniform Power of Attorney Act, which was last updated in 2006 and replaced in its entirety the provisions of the then-current version of the Uniform Durable Power of Attorney Act.
When drafting a comprehensive form of power of attorney, a good starting point is the state-specific version of the optional form of power of attorney appearing in Article 3 of the Uniform Power of Attorney Act, which is a document designed for use by lawyers as well as lay persons and which was deliberately drafted using plain language instructions to principals and agents. Among other things, the form includes step-by-step prompts for designation of the agent and successor agents and grant of general and specific authority, and the Uniform Power of Attorney Act also includes default rules that should be understood before finalizing the content of a power of attorney. In addition, counsel may recommend and draft powers of attorney for clients that are focused on specific activities relevant to the management of the client’s assets as part of the estate planning process. Examples include a power of attorney for management and conduct of business, a power of attorney to manage real property and a power of attorney to convey real property.
Westlaw Next subscribers can learn more about drafting and using durable powers of attorney in Chapter 20 of Business Transactions Solution (Estate Planning).