The General Durable Power of Attorney - A Document for Guardianship Avoidance and Young Adults
A General Durable Power of Attorney (“POA”) is a legal document where a principal gives legal and financial authority to an agent to act on his or her behalf. A POA allows an individual (principal) to choose who they want to make decisions for them if they are unable. This document helps individuals plan for both short-term and long-term disability, because the document remains effective even after an individual becomes incapacitated.
A POA is extremely important for aging individuals, when the ability to manage finances and make financial decisions can begin to decline. This is particularly concerning when an aging individual does not have a POA and is no longer competent to sign legal documents.
When this occurs, family members and loved ones are presented with the stark choice of (a) allowing the aging individual to continue without any help in managing their finances, leaving them open to possible financial exploitation; or (b) filing a guardianship in District Court asking their loved one to be declared no longer competent to manage their personal and financial affairs and that a guardian should be appointed. This is the proverbial - Rock and a Hard Place!
A guardianship is a court proceeding where an individual can be declared legally incompetent by a court and lose fundamental rights. This proceeding can be very difficult for both the family members filing for guardianship and the individual who is the subject of the guardianship. The guardianship process should always be the avenue of last resort for these very reasons.
A POA can also be a valuable tool for families when their children are turning 18 years old. When a child turns 18, they are legally considered an adult and the parents no longer have the legal authority they once held. A POA allows the family to still be involved with financial decisions after the age of 18 while maintaining the young adult’s independence.
Also, parents of children with disabilities are faced with an even more difficult circumstance when their child turns 18. The disability doesn’t disappear just because the child has legally become an adult. Many parents are persuaded to immediately file for guardianship over their loved one, even when a POA can accomplish the same goals. If the young adult can understand and comprehend what a POA does, he or she should be encouraged to sign a POA and not lose his or her fundamental rights.
Agents appointed under a POA are considered fiduciaries according to KRS 457.140. A fiduciary must act in the best interest for a principal and act loyally for the principal’s benefit. An agent is required to keep a record of all receipts, disbursements, and transactions made on behalf of the principal according to Kentucky law. It is important to choose a trusted individual to act as the agent, because of the substantial authority and responsibility that a POA can grant.
As described in this article, a POA can be useful in many different circumstances, for an aging person who needs help with finances, young adults, and a disabled child turning 18. The POA accomplishes many planning objectives and most importantly, preserves an individual’s dignity by providing another person to act for the benefit of the principal without the losing their fundamental rights through in a guardianship.
Written by Attorney, David Ehsan
David Ehsan is an associate attorney at Traughber Private Wealth Law, LLC and focuses his practice on elder law, special needs law, estate planning, estate administration, and guardianship.
10/17/2022 01:25:25 pm
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