Estate Planning: How do I restrain financial power?
Last month I introduced the Durable Power of Attorney or DPA, for short. To recap, your agent with this power can do pretty much anything you can do financially, but they can do it in your name, such as take out a credit card in your name. Being an attorney, I am always concerned with checks and balances. As stated in the previous month’s column this power is critically needed by every adult but how do we keep bad things from happening?
First, you never put anyone in charge that you don’t trust, today to take charge of all of your money. If you hesitate at that thought, then you are considering the wrong person. Choosing the right person is critical.
Next, for the bulk of my clients I recommend a Springing Durable Power of Attorney. A springing DPA only “springs” into effect upon your incapacity. Therefore, even if your agent got a hold of a copy of your DPA they could not use it for bad things while you have capacity.
Contrast that to an Immediate DPA which takes effect the day it is signed. I have seen greedy children do a lot of damage with an immediate DPA therefore be sure you have a good reason to have an immediate DPA.
Next month I will address Bank DPA’s and Internet DPA’s.
Matthew Hart is a California Licensed Attorney who is an Estate Planning, Trust & Probate Law Specialist certified by the State Bar of California. He can be reached at 925-754-2000 or www.MatthewHartLaw.com and he has offices in Antioch and Walnut Creek.