I once knew a couple named Tony and Tina (names have been changed) who were my clients. They had reached the point in their lives where they wanted to downsize. The kids were grown and on their own, and the big house with the big lawn that had to be mowed was more of a hassle than they wanted. They looked around and found a condominium that was a perfect fit: all on one level (Tony’s knees didn’t like stairs), no yard to mow, and a guest bedroom for visits from the grandchildren. Because of the real estate market, the condo was a bargain, and better yet, a young couple soon made an offer to purchase the old family home. When the young couple couldn’t get financing, Tony and Tina agreed to sell the old house to them by a land contract.
Unfortunately, before they could sign the land contract for the old house, or close on the purchase of the condo, Tony had a stroke. As a result, he was left unable to talk, and unable to sign his name. How could they sign the land contract and close on the purchase of their condo? Well, if Tony hadn’t had the foresight to have his attorney draft a Financial Durable Power of Attorney, they would have had an expensive legal mess on their hands. Tina would have had to file an application in Probate Court to be appointed Tony’s legal guardian, and then would have had to file a Civil Land Sale, to get the court’s permission to sell the old family house. Tina would have had to keep Tony’s income separate from hers and would have had to get Probate Court’s permission to spend Tony’s money, even to help pay for utilities and groceries.
But by having Power of Attorney forms created, Tina was able to complete both real estate transactions, signing the necessary paperwork as Tony’s attorney-in-fact. The Power of Attorney forms authorized Tina to act on Tony’s behalf. No guardianship was necessary.
If you are married, you and your spouse should seriously consider executing Power of Attorney forms appointing each other. Yes, there are times when this is not recommended, such as when one spouse can’t be trusted as a result of drug abuse, or a gambling problem. If you are a single person, and you have somebody you really trust, you should consider naming that person on your Power of Attorney. The person named in the Power of Attorney has a legal obligation to do only what is in the best interests of the person who has appointed them. And if circumstances changes, the person who has signed the Power of Attorney can revoke it.
For more information about the Financial Durable Power of Attorney, call Ron Koehler.
