Powers of Attorney. Martin Shenkman
Some attorneys will take the statutory form for their state, retype it on their computer, and charge for what is really no more than filling in a form you could get for free. So long as you are getting legal guidance in terms of how to use the form and what modifications may be made to the form, this may still be a valuable exercise. On the other hand, if you are getting little or no additional guidance, you may be paying for no additional benefit.
Before going to a legal website that charges, check free consumer websites. For example, if you face a health challenge, many of the charities that serve those with health challenges have websites chock full of information and often even provide free forms.
My Internet Power of Attorney
The best way for us to explain how the Internet power of attorney works is to create one. So we did exactly that. We searched “power of attorney form.” Rocket Lawyer popped up at the top of the search for paid advertised links and as number four on the general search.
We expected to find an overly simplistic document that would not address many of the basic issues. And in fact there are plenty superficial and overly simplistic forms on the Internet. But what we found on Rocket Lawyer was a rather comprehensive form, one that is more detailed then what we’ve seen many attorneys use. If the user is sufficiently knowledgeable, this could be a pretty powerful option. What is worrisome, however, is that for a layperson, this level of choice and detail is not only overwhelming, but likely will provide more opportunity to do harm. The layers of decision were anything but simple.
If we were preparing a form for consumers to use without the benefit of an attorney spending the time to really understand and address your personal situation, which is what will happen if you meet with an estate planner, we would opt to keep the decisions far more limited and the form more standardized. We would try to help you identify when you need to really get help, and when the more standardized form might be viable for you. We found the opposite.
The “free” document eventually costs about $50.
The webpage the link goes to, https://www.rocketlawyer.com/form/power-of-attorney.rl, provided the following summary (June 25, 2014):
A Power of Attorney may be either general or specific. A General Power of Attorney gives the Agent broad authority to act for you. A Special Power of Attorney grants the Agent limited authority to act only in specified situations. In addition, you may create a “Durable” Power of Attorney, which means it will remain in effect even if you become incompetent or incapable of handling your affairs. If you do not want the Power of Attorney to remain in effect during these times, then the document can be made “non-durable.”
This information is a bit worrisome and dangerous for consumers. Almost all lawyer-prepared powers of attorney are broad or “general” powers. A general power of attorney gives the agent the authority to handle almost any type of legal, financial, or tax matter that may arise. The point of a power of attorney is almost always to empower someone to act on your behalf in the event of some future unknown emergency. Because the nature of that future emergency cannot be known, the approach almost every attorney takes is to make the power of attorney a broad, all-encompassing document.
The most common future unknown is your being disabled. So why create a power that is not “durable” and will be useless during the prime emergency you were creating it for. It would be the equivalent of buying a generator for your home that won’t work if the power outage is caused by a storm. Yet the quoted introduction, in our view, puts you in the position of misunderstanding the most fundamental principles of powers of attorney. Even if later instructions encourage you to chat or ask questions, are you likely to do so? Will you really understand this essential nuance?
In contrast, the Legalzoom website provides the following introduction:
A power of attorney lets you appoint someone you trust to handle important financial and legal matters on your behalf either immediately or only if you are unable to make decisions for yourself.
While this is a pretty good description, will using their forms be better than a free state statutory form? Will an intelligent consumer be able to discern the important nuances in what to do?
While the Rocket Lawyer form was impressively comprehensive, and the prompts to input data and make decisions well done and easy to navigate, the “help” explanations provided were sometimes not relevant, and too often dangerously inadequate. In Rocket Lawyer’s defense, consumers completing a power of attorney might not be willing to read pages of discussion about the legal nuances of what to do with a particular provision if they provided it. But that is the gist of the problem. Many of the decisions you have to make to complete your power of attorney can have a profound impact on the future use of the document and whether it will really serve your purposes.
Bottom Line
Providing a pretty good form and a comfortable interface doesn’t substitute for legal judgment and experience. While Rocket Lawyer is quite honest about this limitation, will a consumer really understand it? If you scroll to the bottom of the Rocket Lawyer home page and click on “terms of service” you’ll see a very detailed legal disclaimer that appropriately includes the following: “Rocketlawyer.com should not be used as a substitute for the advice of an attorney.” You can get a pretty good form with lots of options. But what you don’t get is the wisdom of someone who has had decades of experience with these issues to can guide you in making the right decisions for your situation. While Rocket Lawyer and other similar sites offer chat and call-in functions, and some of these may be with a lawyer, chatting with an attorney alone is not legal representation nor is it the type of personal interaction that can really protect you. If you meet face to face with an experienced estate attorney, and candidly review and discuss your overall circumstances, you will see that there is a range of steps you should take. Even an attorney on the other end of a chat cannot provide this essential component. To be fair, merely hiring a lawyer will not assuredly provide you this advantage either. You need to tailor a power of attorney and all other planning to address your goals and situation by:
•Hiring an attorney with appropriate knowledge and experience,
•Who actually takes the time to understand you and your circumstances,
•Who then works with you (which requires your cooperation and participation as well).
Here are a few of the issues to consider:
•You might inadvertently create a special or limited power when you in fact should have a broad or general power.
•You authorize your agent to have access to your safe deposit box but not to remove items. Will that really suffice? What if you store your original documents in the box? If you keep a list of passwords in your safe deposit box and you only authorize your agent to “inventory” the contents of your box will the bank merely permit the agent to note that there is a list of passwords and not to copy them? That could require your agent to obtain a court approval of taking the contents, a process that will be more time consuming and far more costly than having merely hired a lawyer to have drafted the document properly.
•You might not authorize the sale of real estate, such as your home, which could prove a significant mistake. The form is even more flexible and permits you to authorize your agent to sell a specific property and even to mandate that the sales price has to be above a certain minimum amount. Many people are very emotional about the sale of their home and may prohibit this. However, if you are disabled, which is the most likely scenario for your agent to be acting, why should a house you may not be able to live in be kept? The financial detriment of having to continue to pay carrying costs long after you have moved may be quite adverse. If you set a minimum sales price, what happens if the market declines? This type of approach if used in 2008 may have prevented an agent from selling a house for years as housing values collapsed. The only alternative to stop the financial outflow might be for your agent to go to court and try to get approval to sell. However, in contrast to a simpler and more general power, a judge may be