Let's work backwards with this Tip of the Month. We'll start with the disclaimer that we are NOT attorneys. We've attached the personal Power of Attorney prepared for and used by Marty Abo as we want to show you, we try to "practice what we preach". However, the illustration is for informational purposes only and is NOT to be relied upon as legal advice. This is not a substitute for the advice of an attorney and we encourage readers to have your own document prepared and reviewed by an experienced lawyer. For example, as Ray Console, Esq., tax partner at Cozen O'Connor, reminded us in drafting this for Marty, this form is New Jersey specific. The most effective General Durable Power of Attorney is prepared in accordance with the law of the applicable jurisdiction in which the client resides. To our knowledge, there really isn't an effective "all-state" form. If you need the name of one of the many seasoned attorneys we know with this expertise, you should just give us a call.
Now to the Tip of the Month. As estate planners, we realize you've probably heard us stress the importance of ensuring you have a valid and current will. Well, equally important in your attorney's arsenal of planning tools, is a Durable Power of Attorney (POA). This simple and relatively inexpensive document allows you to choose who will be in control of your financial and other affairs should you be unable to act on your own behalf. Lingering in the mind of many of our clients and non-clients is the misperception that their spouse or adult child can automatically sign documents for them if they are mentally or physically incapacitated. This is just not the case, even when joint ownership situations exist. The POA needs to be done while you are legally competent, alert and aware of the consequences of your decision. Once a serious problem occurs, it is just too late and your family can probably not avoid the inconvenience and expense of legal proceeding
A durable power of attorney is a written document in which a competent adult individual (often called the principal) appoints another competent adult individual (called the agent or attorney-in-fact) to act on the principal's behalf. Generally, an attorney-in-fact may perform any legal function or task which the principal has a legal right to do for him/herself. We've seen such encompassing: sign checks, make deposits, pay bills, borrow, handle legal claims, gain access to safe deposit boxes, deal with insurance and retirement benefits, exercise stockholder rights, contract for services, do Medicaid planning, collect social security and other benefits, exercise rights of the settler or grantor of a trust, prepare tax returns or at least have them prepared (hopefully by Abo and Company), file tax returns, make health decisions, sell property, invest money, hire individuals to manage your business and other such tasks. The only restriction we are aware of is that your agent cannot write and sign a will for you, and his or her powers become void upon your death.
A principal may cancel a power of attorney at any time for any reason. Powers granted on a power of attorney document can be very broad or very narrow in accordance with the needs of the principal. This durable POA continues to be valid even after the principal becomes incapacitated. If you want to prepare a power of attorney but do not want the attorney-in-fact's power to vest until you become legally incapacitated, you can create a "springing power of attorney". A "springing power of attorney" becomes effective only upon the happening of an event that you have designated. No matter what type of power of attorney you create, it will terminate automatically when you die. Please appreciate that without a valid POA, your family may have to undergo the costly and time-consuming process of court supervision of your affairs.
The Power of attorney can be limited to certain specific responsibilities or it can cover large general areas of decision-making regarding your affairs. It is best to work with an attorney to make the arrangement as precise but as flexible as needed. As Ray Console pointed out to Marty, financial institutions are often suspicious about accepting a General Durable Power of Attorney. That's why he tries to cover every possible situation he can think of with specific language and tries to bend over backwards to release and hold harmless third parties. Such is why we strongly recommend the POA be drafted by an attorney experienced in this area. Even though it is a relatively simple document, there are many factors you should consider when deciding exactly what powers you want to entrust to your agent, who will be named as agent, and how the POA will become effective.
GENERAL DURABLE POWER OF ATTORNEY
I, MARTIN H. ABO, (“Principal”), residing at _________________Cherry Hill, NJ, designate JANE P. ABO, residing at ___________________Cherry Hill, NJ, my attorney in fact and agent (“Agent”) in my name and for my benefit:
General Grant of Power. To exercise or perform any act, power, duty, right or obligation whatsoever that I now have or may hereafter acquire, relating to any person, matter, transaction or property, real or personal, tangible or intangible, now owned or hereafter acquired by me, including, without limitation, the following specifically enumerated powers. I grant to my Agent full power and authority to do everything necessary in exercising any of the power herein granted as fully as I might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that my Agent shall lawfully do or cause to be done by virtue of this power of attorney and the powers herein granted:
Powers of Collection. To forgive, request, demand, sue for, recover, collect, receive, hold all such sums of money, debts, dues, commercial paper, checks, drafts, accounts, deposits, legacies, bequests, devises, notes, interests, stock certificates, securities, partnership interests, bonds, dividends, certificates of deposit, annuities, pensions, profit sharing, retirement, social security, insurance and other contractual benefits and proceeds, all documents of title, all property, real or personal, intangible and tangible property and property rights, and demands whatsoever, liquidated or unliquidated, now or hereafter owned by, or due, owing, payable or belonging to me, or in which I have or may hereafter acquire an interest; to have, use, and take all lawful means and equitable and legal remedies and proceedings in my name for the collection and recovery thereof, and to adjust, sell, compromise, and agree for the same, and to execute and deliver for me, on my behalf, and in my name, all endorsements, releases, receipts, or other sufficient discharges for the same;
Powers of Payment. To pay any and all bills, accounts and debts that may be due by me or to expend funds for my support, maintenance, medical care or any other personal needs, taking into account my accustomed to standard of living;
Power to Acquire and Sell. To acquire, purchase, exchange, grant options to sell, and sell and convey real or personal property, tangible or intangible, or interests therein, on such terms and conditions as my Agent shall deem proper;
Management Powers. To maintain, repair, improve, invest, manage, insure, rent, lease, encumber, and in any manner deal with any real or personal property, tangible or intangible, or any interest therein, that I now own or may hereafter acquire, in my name and for my benefit, upon such terms and conditions as my Agent shall deem proper;
Banking Powers. To conduct banking transactions as set forth in section 2 of P.L. 1991, c.95 (46:2B-11), including, without limitation, the power to make, receive and endorse checks and drafts, deposit and withdraw funds, acquire and redeem certificates of deposit, in banks, savings and loan associations and other institutions, execute or release such deeds of trust or other security agreements as may be necessary or proper in the exercise of the rights and powers herein granted;
Power to Borrow and Give Security. To borrow from time to time such sums of money upon such terms as my Agent shall deem appropriate for, or in relation to, any of the purposes or objects described herein, upon the security of any of my property whether real or personal, or otherwise, and for such purposes to give, execute, deliver and acknowledge mortgages with such powers and provisions as my Agent may think proper, and also such notes or bonds as may be necessary or proper in connection therewith;
Vehicles. To apply for a Certificate of Title upon, and endorse and transfer title thereto, for any boat, automobile, truck, pickup, van, motorcycle or other vehicle, and to represent in such transfer assignment that the title to said vehicle is free and clear of all liens and encumbrances except those specifically set forth in such transfer assignment;
Securities. To buy and sell stocks, notes, mutual funds, securities, partnership interests, bonds, and options both on a covered and uncovered basis; to borrow in any said margin account and to sign stock powers, bond powers, stock certificates, bond certificates and any other documents necessary to effect transfer of securities;
Real Property. To execute, acknowledge, and deliver in my name any deeds or instruments of conveyance that may be required for the transfer of interests in real property and, upon delivery of said deeds and other instruments of conveyance required, to receive checks or cash or any payments of any kind to be made in connection therewith and to receive on my behalf any money payable to me upon the closings and thereafter, whether for purchase price or for adjustments of taxes, insurance premiums or otherwise, and to pay any amounts required to be paid by me, whether for taxes or otherwise;
Life Insurance. To exercise on my behalf all options, rights, privileges and interests under any insurance policy, including the rights to assign, borrow upon, surrender, pledge, convert, renew, and designate the beneficiary thereof;
Interest in Estate or Trust. To act for my behalf on any matters related to an estate or trust in which I might be an interested person, including, but not limited to, exercising any power of appointment or disclaiming assets, rights or powers I may possess;
Business Interests. To conduct or participate in any lawful business of whatever nature for me and in my name; execute partnership agreements and amendments thereto; incorporate, reorganize, merge, consolidate, recapitalize, sell, liquidate or dissolve any business; elect or employ officers, directors and agents; carry out the provisions of any agreement for the sale of any business interest or the stock therein; and exercise voting rights with respect to stock, either in person or by proxy, and exercise stock options;
Tax Powers. To prepare, sign and file joint or separate income tax returns or declarations of estimated tax for any year or years; to prepare, sign and file gift tax returns with respect to gifts made by me for any year or years; to consent to any gift and to utilize any gift-splitting provisions or other tax election; and to prepare, sign and file any claims for refund of any tax;
Safe Deposit Boxes. To have access at any time or times to any safe deposit box rented by me, wheresoever located, and to remove all or part of the contents thereof, and to surrender or relinquish said safe deposit box, and any institution in which any such safe deposit box may be located shall not incur any liability to me or my estate as a result of permitting my Agent to exercise this power;
Transfer to Trust. To transfer any or all assets of mine to any revocable inter vivos trust which I have created;
Payment of Support of Others. To continue or commence providing funds for the support, maintenance, medical care and education of my dependents (or any other person I am supporting when I become incapacitated), after considering my personal needs and resources, my relationship to such persons, and my and their accustomed standard of living;
Gifts. To continue or commence a program of gifts in a manner consistent with my expressed wishes, including, but not limited to, customary gifts to family members for special occasions, such as holidays, birthdays, graduations, weddings and the like, and for estate planning purposes or the reduction of taxes;
Digital Assets. To access, use and control my digital devices, including, but not limited to, desktops, laptops, tablets, peripherals, storage devices, mobile telephones, smartphones and any similar digital device which currently exists or may exist as technology develops or such comparable items as technology develops for the purpose of accessing, modifying, deleting, controlling or transferring my digital assets, and the power to access, modify, delete, control and transfer my digital assets, including, but not limited to, my emails, email accounts, digital music, digital photographs, digital videos, software licenses, social network accounts, file-sharing account accounts, financial accounts, domain registrations, DNS service accounts, web hosting accounts, tax preparation service accounts, on-line stores, affiliate programs and other on-line accounts and similar digital items which currently exist or may exist as technology develops or such comparable items as technology develops.
Retirement Plans. To manage investments, make or change beneficiaries, make or change distribution elections, exercise any rights or take any other actions on my behalf as my Agent shall deem proper with respect to any qualified retirement plan or individual retirement account.
Interpretation and Governing Law. This instrument is to be construed and interpreted as a general durable power of attorney pursuant to the provisions of the New Jersey Revised Durable Power of Attorney Act (N.J.S.A. 46:2B-8.1, et seq.) or any successor statute concerning durable powers of attorney. The enumeration of specific powers herein is not intended to, nor does it, limit or restrict the general powers herein granted to my Agent. This instrument replaces any other general power of attorney or other document of similar nature that I may have previously executed, and any such documents shall be considered null and void from the moment I executed this instrument. This instrument is executed and delivered in the State of New Jersey, and the laws of the State of New Jersey shall govern all questions as to the validity of this instrument and the construction of its provisions.
Third-Party Reliance. Third parties may rely upon the representations of my Agent as to all matters relating to any power granted to my Agent, and no person who may act in reliance upon the representations of my Agent or the authority granted to my Agent shall incur any liability to me or my estate as a result of permitting my Agent to exercise any power. I, for myself, my heirs, personal representatives and assigns do hereby agree to indemnify and hold harmless any person relying upon the apparent authority of my Agent. Any third party may rely on a duly executed copy of this instrument (whether a typed original or photostatic copy) or a photocopy of an executed photostatic copy of this instrument certified by my Agent to be a true copy of the original hereof.
Disability of Principal. N.J.S.A. 46:2B-8.2.b. authorizes me to provide that this power of attorney shall not be affected by my disability or incapacity or lapse of time, and I do hereby so provide, it being my intention that all powers conferred upon my Agents herein or any substitute Agent designated by me shall remain at all times in full force and effect, notwithstanding my incapacity, disability or uncertainty with regard to my death, or the lapse of time.
Substitute Agent. If JANE P. ABO ceases to act as my Agent due to death, incapacity or resignation, I appoint BENJAMIN N. ABO as my Agent.
[ALTERNATE #1] Joint and Several Powers of Agents. If more than one person is designated herein as my Agents, they shall consult with each other and act in unison, but shall be jointly and severally vested with all of the powers conferred herein. In such case, any of my said Agents may exercise the powers granted herein unilaterally, and it is not necessary for all of them to join in the exercise of such powers. The signature of any Agent shall be valid and binding. Third parties may act in reliance upon the representations of any of my Agents and shall not incur any liability to me or my estate as a result of permitting any of my Agents to exercise any power conferred hereunder.
[ALTERNATE #2] Mutual Powers of Agents. If more than one person is designated herein as my Agents, they shall execute the powers conferred herein mutually. In such case, the decision of both of my Agents shall be required to exercise such powers. Any decision thus made by my Agents shall require the signatures of both of my Agents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 25th day of July, 2020.
STATE OF NEW JERSEY :
COUNTY OF :
On the 29th day of July, 2020, before me personally came MARTIN H. ABO to me known to be the individual described in and who executed the foregoing instrument, and who acknowledged to me that the execution thereof by such individual was done voluntarily for the purposes therein expressed.