This is one of the most powerful planning tools for estate planning, as well as for Medicaid and other public benefit planning.

When a person (the principal) signs a power-of-attorney ,he gives another person (the agent) power to act of his place and on his behalf in managing his assets and affairs. Agent's powers may ,be broad and sweeping so as to include almost any act, which the principal might have performed. It should be noted, however that, in general, acts which are inherently testamentary in nature, such as the authority to make or revoke a will may not be performed by an agent.

A power-of-attorney can be either a "general" power of attorney, where agent may perform almost any act principal might have performed himself regarding financial management of his affairs, or a "limited" power-of-attorney where the agent has one or more specific powers, such as power to sell a particular property to particular purchaser at a particular time. Single principal may name one or more agents who can be authorized to act either "jointly" or "severally" (alone without other agent signature.

"Durable power-of-attorney" is unlike normal power-of-attorney which becomes inoperative upon incapacity of principal. Durable power-of-attorney, provides that those powers granted to agent shall not be affected by the subsequent disability or incapacity of principal or by lapse of time.

In most states, in planning for asset management, you should consider granting to agent other important specific powers in addition to those enumerated by statute and found on conventional pre-printed form power-of-attorney. Unless such additional powers are specifically drafted into document, agent will have no authority to act. Following are a few of many specific powers which principal should consider including in power-of-attorney: Power to make gifts, change the principal's domicile to a state where Medicaid rules are more favorable, access to safe-deposit boxes, to renounce or disclaim an inheritance and/or insurance proceeds, ability to sign tax returns and IRS powers-of-attorney, to set up and fund trusts and amend existing trusts. In drafting power-of-attorney, care should be given to confer powers with as much specificity as possible to avoid possibility of a court construing a specific omission as intent to fail to grant that specific power. Such an adverse finding could be a serious detriment to assets.

Advantages for Seriously Ill

Power-of-attorney for asset mangaement in case of a seriously-ill or disabled person is especially useful in situations where person's assets may be modest and, accordingly, do not warrant expense associated with other planning techniques such as trusts or guardianships.

A great advantage of durable power-of-attorney is that it remains effective after principal's incapacity. Agent, can act immediately, upon principal's incapacity, to manage his assets or to take various measures without initiating costly and time consuming guardianship proceeding to obtain the court's authorization for transactions.

Health - Care Considerations:

In a few states, principal allowed to delegate to agent in durable

POA various health care powers in addition to control over financial matters. In New York, however, a health-car power-of-attorney must be a separate document from a power-of-attorney.