Purpose Of A Power Of Attorney
An important component of an estate plan is a statutory durable power of attorney, otherwise called a general power of attorney. This power of attorney allows you to name an agent or agents to carry on business type activities on your behalf if for any reason you are not able to do so yourself.
Consequences Of Not Having A Power Of Attorney
The reason it is so important to have this power of attorney drawn up is that if you become incompetent or incapacitated, and you have no spouse or the third party you’re dealing with will not allow your spouse to act on your behalf, your only option is to have a guardianship proceeding opened.
Guardianships Should Be Avoided If Possible
Guardianships are extremely expensive, complicated, and time-consuming. In addition to the court filing fees, service fees, and attorney’s fees the applicant for the guardianship, an “attorney ad litem” will be appointed to represent the interest of the incapacitated person, who is called the ward.
Cost Of Guardianship
The guardianship application process, even if uncontested, will likely cost about $5,000. If it is contested, meaning that more than one person seeks to be appointed or another interested person disputes that a guardian is needed, the costs can easily go to $10,000 or more.
Lack Of Choice Of Guardian
One other drawback of failing to draw up a power of attorney is that you may have no choice about who is appointed your guardian. The court will follow a statutory order of persons who have precedence to be appointed. You may love these people dearly but have no confidence in their ability to manage your financial matters.
Draw Up A Power Of Attorney Now
The simple way to avoid all of this guardianship complication is to have the statutory durable power of attorney drawn up before there is any question about your competency. The cost for preparation of this document will likely be in the range of $350-$500.
What are you waiting for?
If you would like to talk about drawing up a statutory durable power of attorney, please call Adair M. Buckner for a free initial consultation.*