Ask a Lawyer : Chapter 29 - Married...With or Without Children

How to Handle Springing Powers of Attorney

Q. I understand the benefits of springing powers of attorney, but I understand too that there can be problems in determining when the powers should “spring.” What are some solutions?

A. We often prepare springing powers of attorney that specify that the incompetency be determined by two physicians, one of whom, if possible, should be the family’s doctor.

Answer by Edgar Farmer, Husch & Eppenberger Saint Louis , Missouri

A. I tell my clients to use an instructions letter with the power of attorney, which I prepare. The letter says that the power of attorney is immediately effective, but the donor of the power asks that it not be used except in case of incapacity.

Answer by Rik Huhtanen, Attorney at Law, Eugene , Oregon

Special Tax Breaks for Spouses

Q. Is it true that the tax laws give spouses tax-saving opportunities that others don’t have? What are some of the things they can do to avoid taxes?

A. It is true that spouses have a privileged position under the tax law. Any gift that you make to your spouse, either during your life or at our death, is exempt from federal gift and estate taxes, regardless of the amount. Almost all states extend this same favorable treatment to gifts between husbands and wives. The only exception is if your spouse if not a U.S. citizen. Then the gift is taxable unless it meets special requirements to ensure that your spouse does not take the property offshore.

Answer by Harold Pskowski, BNA Tax Management, Washington DC