There is a convergence of a number of factors that will cause us to increasingly think much longer and harder about what we need to do to best plan for our incapacity. For instance, greater consideration will need to be given to using powers of attorney that goes beyond a purely domestic approach.
Many of us are familiar with the use of multiple wills if you have assets in different jurisdictions. See our Advisory Multijurisdictional and Separate Situs Will Planning for further information. But what about multiple powers of attorney?
We are getting older, living much longer, travelling more, and are increasingly residing in other jurisdictions for protracted periods each year—in particular, in warmer climates.
We increasingly are less domestically focused. We acquire second homes outside our home jurisdiction—whether a ski place in the mountains, a golf villa in a sunny clime, or maybe a country home in a rural setting. And if we are not buying a place, we may be renting and spending significant time outside our home jurisdiction.
These trends will likely only increase and, as we become more mobile, incapacity planning needs to be more thoroughly considered to ensure our best interests are served, wherever we may live. Without proper planning, should you become incapable and have assets in other jurisdictions, you and your family could be subject to court proceedings to appoint a guardian or equivalent, which is intrusive, expensive and subject to ongoing court supervision.
INCAPACITY PLANNING USING MULTIPLE SEPARATE SITUS POWERS OF ATTORNEY
(a) Why Use Multiple Separate Situs Powers of Attorney?
At this point in the development of the law, there is a lack of harmonization between many jurisdictions as to what effect a power of attorney prepared in one jurisdiction will have in another jurisdiction, in particular powers of attorney for personal care and advance health directives.
Due to this lack of certainty, and also the time, expense, delays and lack of certainty of success in seeking legal opinions and other processes to try to validate powers in another jurisdiction, a practical approach is to have a local power of attorney for property and for personal care or equivalent instrument in each jurisdiction where you have assets, in particular real estate, or spend significant time. As an example, many have vacations homes in Florida and Arizona. Consideration should be given to having local powers of attorney in each state.
It is important to carefully review your assets and understand your lifestyle and residence patterns. How much time is spent outside your jurisdiction and in which other jurisdictions? Do you have assets, in particular real estate, outside your home jurisdiction? How is title held? Solely in your name, jointly or otherwise? What is your age and general health? Based on these inquiries, an assessment can be made for which jurisdictions powers of attorney in local form should be prepared and where one may not be necessary. For example, it may be possible to change ownership or retitle assets, such as from sole to joint account for certain financial assets, although this should only be done after taking into account all relevant consequences, including tax consequences of any transfer and the loss of control over the assets.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
