If you become disabled, who is going to have the authority to pay your bills and manage your property until you recover? If you do not grant such authority before-hand, the only option is to apply for a court appointed conservator. Disability planning is advance planning to delegate authority to act in the event of your incapacity.

 

WHAT IS A DURABLE POWER OF ATTORNEY?
When you give someone a power of attorney, you are giving him/her the right to exercise the same power over your property and affairs that you have. For example, you have the power to spend money, sell property, cash checks, withdraw money from the bank, and enter into contracts. You can create trusts, amend an existing trust, and make gifts. Normally no one else can exercise these legal rights for you. However, you do have the right to delegate your power to someone else to do those things for you. You can do this by giving that person a "power of attorney." Granting someone a power of attorney does not limit your own rights, it simply gives the other person the power to act when or where you cannot. The person whom you give these powers is your "attorney-in-fact."

 

A "durable" power of attorney grants the power to act on your behalf, even if you should become incapacitated in the future. Traditionally, powers of attorney lapsed (became ineffective) when the grantor became incapacitated, because in theory you were giving someone the power to stand in your place and use only those legal powers you actually possessed. As your own powers and rights disappear when you become incapacitated, the rights you gave your "attorney-in-fact" also disappeared. Oregon has passed a law to change this tradition and allows powers of attorney to survive the incapacity of the grantor.

 

WHY GIVE SOMEONE A POWER OF ATTORNEY?
Unfortunately, as we get older the odds that we may become incapacitated, either mentally or physically, rise. Unless this has happened to a close friend or family member, you will not understand how difficult it is for family and friends to handle your financial and personal affairs.

 

Where no power of attorney is in place, often a family member or friend will be forced to seek court appointment of a conservator or guardian. The person thus appointed can then act for you just as if they had a power of attorney. A conservator only has control over the ward's financial affairs and a guardian has control only over personal affairs. Thus it is usually necessary to seek appointment of both a guardian and a conservator in order to deal with all the problems posed by incapacity.

 

There are several drawbacks with having court appointed guardians and conservators. First of all, you don't choose who would serve, the court does, and it is most often the first person who applies. Second, the process of appointing a guardian or conservator is quite costly in terms of attorneys' fees and administrative expenses. Third, the administration of a guardianship or conservatorship is complicated. Once the appointment process has ended, the guardian or conservator must file an inventory of assets, keep meticulous records, get permission before certain expenditures, and prepare yearly accountings for the court.

 

Finally, when the court appoints a guardian or conservator, the proceeding has the effect of determining that you are incapacitated. Unlike giving someone a power of attorney, this determination takes away your right to act on your behalf.

 

Your power of attorney can be either very broad or very limited. It can be drawn to take effect right away or take effect only if you become incapacitated. If the power of attorney is drawn to take effect only when you become incapacitated, you should deliver the power to your attorney in fact along with a letter explaining the circumstances under which you wish him or her to act on your behalf.

 

CONCLUSION
Because a broad durable power of attorney is an important and basic planning tool, I generally recommend it to all my clients. However, if a client is not comfortable granting extensive authority to their attorney in fact, the basic form can be changed to accommodate those concerns.

 

If you have additional questions, you may contact me as follows:

 

James F. Little,
1430 Pine Street,
Silverton, OR 97381
Telephone: (503) 873-6081 Office;
(503) 873-7919 Home