Taxation & Estate Planning

Powers of Attorney: Do You Want to Act as Agent?

By Joel A. Schoenmeyer

My prediction is that, as more and more baby boomers become fiduciaries for their parents, we're going to get a lot more articles like the very good one by Helen W. Gunnarsson in last month's Illinois Bar Journal (available for members here).

Powers of attorney were created in response to a very real problem: if you are disabled, who can make decisions for you? The "old school" way to proceed was with a guardianship -- that's very expensive and very time-consuming. But there are also problems with powers of attorney, which give the agent acting under them a LOT of power. Also, there are a lot of gaps in the law, which the article mentions. For instance, we just don't know whether an agent under a health care power of attorney is eligible to receive compensation.

All of this creates a lot of uncertainty for individuals named as agents. The solution is to get your own representation, to negotiate the terms of the power of attorney and to explain the agen'ts duties, but that's rarely done. It seems to me that we are seeing an attempt to turn law into a commodity. "Why should I spend the money to do X?" when X is, in this case, the legal equivalent of preventive medicine. Of course, when things go wrong, costs and aggravation can skyrocket, and THEN people want to (or have to) bring in the lawyers.

Full post as published by Death and Taxes Blog on September 11, 2008 (boomark / email).