The Problem with Durable Powers of Attorney

When Covid-19 symptoms escalate to the point of requiring a patient to be put on a ventilator, they are typically placed into a medically induced coma, which results in a period of incapacity rendering the patient incapable of making any decisions.

People often prepare for this by executing a durable power of attorney designating another person as agent to make financial decisions while they are incapacitated. (Similarly, Advance Health Care Directives are used to name agents to make medical decisions.)

Although the durable power of attorney is typically included as part of a person’s estate planning documents, it’s important to realize that financial institutions are often reluctant to rely on self-prepared or attorney-drafted forms. During a time of crisis, this can cause unwanted delays and complications.

Revocable living trusts, however, often do not cause the same type of issues. Your trust document can include provisions that automatically designate a successor Trustee in the event you are no longer able to act. Assuming your revocable living trust is properly funded with sufficient assets, your successor Trustee should be able to quickly step in and assist you with handling your financial affairs.

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