True to its nature, a crisis often occurs when you least expect it. For example, your mom calls you in the wee hours to say that your father has had a stroke and is in the hospital. This seems unbelievable: Your folks came over for dinner last night, and your dad looked and acted just fine.
Fortunately, your father assigned power of attorney to you when he updated his will last month. As you get ready to drive to the hospital, you cannot help thinking about what that responsibility entails.
Two main types
There are several kinds of powers of attorney, but two are common to estate planning: the durable power and the springing power. The former is effective immediately and does not require proof of your father’s incapacity for you, as his agent, to take on chores such as signing checks and managing household finances on his behalf. The other type, the springing power, is an agreement that does not go into effect until a physician confirms that your father is either incapacitated or mentally incompetent and therefore incapable of making financial decisions.
Dividing the powers
When your father updated his will, he assigned the springing power of attorney to you. Therefore, to begin, you will need a letter from his doctor verifying that your parent is temporarily incapacitated. The doctor expects him to recover all his faculties, at which time Dad will resume taking care of his financial affairs.
Keep in mind that it is not uncommon for someone who has a complicated estate plan to divide the responsibilities created by incapacity or incompetency. Many people want to avoid having one person in charge of everything. For example, while your dad might give you narrow powers so that you can write checks for him, he might give someone else, such as an attorney, powers to deal with his investments and any estate-planning issues that may arise.
For the moment, however, you will be able to act as the agent for your father. By holding his power of attorney, you can relieve his mind about money matters, giving him the time to relax and heal from his ordeal.