Estate Planning Newsletters

I am pleased to write to you during this festive season, to send holiday greetings, to offer estate planning suggestions and to announce that my office has moved to 5 Militia Drive in Lexington. We have a first floor location with plenty of free parking.

The Durable Power of Attorney (DPOA) is a basic estate planning document I draft for clients, and clients often have questions about it. First, it is a lifetime-only document which termi nates upon the death of a person granting the DPOA (the “grantor”). By signing any POA, the grantor is designating the recipient of the POA, or “attorney-in-fact” as his or her “agent” to perform the tasks listed in the document. What makes the DPOA “durable” is that it legally stays in effect, even if the grantor becomes mentally disabled.

Once someone becomes mentally disabled, a properly drafted DPOA signed before that person is deemed mentally disabled, can be used for almost every task involving the disabled person’s property. Typical tasks covered by the document include the signing of checks, all types of withdrawals from the grantor’s accounts, selling and buying of the grantor’s property, creating trusts, and making gifts of the grantor’s property. In effect, the agent recipient “stands in the shoes” of the grantor. Without a previously signed DPOA, the disabled person has no legal capacity to sign legal documents, including a trust, or a new power of attorney. At that point, the only option for managing a person’s property is a Probate Court Guardianship.

Probate Court Guardianships can be expensive and time-consuming. Major transactions involving the “ward’s” (i.e. a disabled person under guardianship) property require court approval and a hearing, where “interested parties” (potential heirs) are invited to object. While the process of administering a deceased person’s estate in the Probate Court has been streamlined, by contrast, guardianship matters have not, and can be bogged down for many reasons. In addition, the guardian’s records of spending and investments of the ward’s assets are scrutinized, and such “accounts” are reviewed by the ward’s heirs and require approval by the Probate Court. All too often, the ward’s assets are depleted by court and attorney fees.

A non-spousal DPOA should be given to a respected and honest family member. Keeping accurate records protects everyone in case motives and actions are questioned. A recipient of a DPOA is a “fiduciary”. Fiduciary responsibilities impose a high legal standard of ethical behavior upon the recipient. Before signing a DPOA, potential conflicts and jealousies within the family should be considered. A grantor’s written guidelines and intentions can be helpful, but if they are overly specific, they may impinge on a recipient’s need for flexibility to deal with unanticipated future contingencies. However, a DPOA does have its limitations. A Will, for example, cannot be signed under authority of a DPOA. Finally, some banks are reluctant to honor a DPOA if it is not “recent”. It is good practice for the non-disabled grantor to sign a new DPOA every few years to satisfy restrictive financial institutions.

My practice continues to grow in the areas of estate settlement and estate and tax planning. I also represent clients in all real estate transactions, as well as contract law, criminal, personal injury, and business litigation. My firm's web site is http//www.georgefootepc.com/; my e-mail address is georgefoote@rcn.com. If you know someone in need of legal services, I hope you will recommend me to them. This letter is one of the few “advertisements” I use, as I rely primarily upon recommendations from clients. Thank you for the referrals you have provided in 2006 and I wish you good health, good times, and peace in 2007.