Massachusetts Durable Power of Attorney

A Massachusetts durable power of attorney designates who will make decisions on your behalf should you become incapacitated. The principal is the person who grants the power. The agent is the person designated to make financial and legal decisions on the principal’s behalf. The agent owes a fiduciary duty to the principal. 

There are two main types that we use: a springing power of attorney, or an immediate power of attorney. A springing document only takes effect after a specified event has occurred. Typically, it requires a doctor to declare you incapacitated and unable to make your own decisions. Whereas an immediate document takes effect the moment you sign it.

Springing or Immediate?

Typically, people are hesitant to make their power of attorney immediate because the power could be used before their incapacity. However, an immediate power of attorney makes the most sense for individuals for a multitude of reasons. First, getting an incapacity letter from a doctor takes time, and typically an individual wants to start taking control of the finances as quickly as possible. Second, if you don’t trust the person you name as your agent to have those immediate powers, then they probably shouldn’t serve as your fiduciary. Finally, some jurisdictions, such as Florida, do not recognize springing powers of attorney.

Who to Designate as your Agent?

It is important to exercise diligence when picking an agent due to the wide powers granted. Furthermore, if you’re drafting a POA as a part of your estate plan, you should make sure the agent and trustee/executor/personal representative can communicate. Indeed, it may even be wise to designate the same person to hold these roles. Therefore, streamlining the transfer of power from incapacity to the estate will occur. Regardless, you need to ensure that you trust the person you designate as your agent. Otherwise, you run the risk of having lawsuits due to the agent acting improperly or in bad faith.

Methods of Caution

Additionally, one can protect against the possibility of an immediate power of attorney acting before the principal becomes incapacitated by leaving the original copy of the document with a trusted third party. This could be a lawyer, financial advisor, neighbor, or family friend. You would instruct them to deliver the document to the designated fiduciary only when you are mentally incapacitated. Remember, the designated power of attorney cannot act unless they have possession of the original copy of the document which appoints them.

Additional Powers

Finally, a power of attorney document can give the designated fiduciary more than just the ability to make financial decisions. It may also have the ability to make gifts, borrow money on the principal’s behalf, and even make changes to the principal’s estate plan. The document needs to specifically enumerate these powers. Therefore, it’s always important to discuss with your estate planning attorney whether granting the specific powers is the right decision for you and your family.