Durable Power of Attorney
A Durable Power of Attorney (Durable POA) allows you to appoint an agent (also known as an Attorney-in-Fact to handle your affairs when you are incapacitated. It authorizes that person to act on your behalf regarding either your financial or medical necessities, depending on your wishes.
In this article, we explain in detail what a Durable Power of Attorney form is and how it can be created and used effectively. It covers how this kind of Power of Attorney compares to other types of POA available and describes why it might prove useful for your planning for old age.
Why To Create a Durable Power of Attorney
A Durable Power of Attorney is highly useful when estate planning and preparing for advanced age. It can offer great comfort and peace of mind that your affairs will be properly managed by someone you trust when you are unable to yourself.
It allows you to grant authority to an agent that continues even if you become disabled or incapacitated. As a result, important decisions about your life and your property can continue to be made even if you can’t personally grant consent.
The benefit of a Power of Attorney in this situation is that it provides a template for what responsibilities you need taken care of for you. You will also be able to appoint the person who can best carry out your financial or medical necessities in a way that reflects your personal wishes.
Durable Power of Attorney V.S. General Power of Attorney
Many types of Durable POA are created to manage finances and these have numerous similarities with General Power of Attorney legal documents. However, these two types of documents are not entirely the same in practice.
A General POA is designed to allow a fully conscious and mentally competent principal to delegate financial decision-making to an Attorney-in-Fact. This might be necessary if you want a trusted expert to speedily handle a broad range of fiscal issues for you such as buying and selling property, managing stock market assets, etc.
The problem with a General Power of Attorney however is that it normally becomes ineffective if you are no longer mentally competent. It therefore, cannot be used to plan for your old age.
A Durable Power of Attorney can also be set up with the same financial provisions as General Power of Attorneys too. However, unlike a General POA, it will continue to be effective even if you become unconscious or incapacitated. This makes it a much better document to use to plan for advanced age.
Power of Attorney for Health Care V.S. Financial Power of Attorney
A Durable Power of Attorney can either be created for health care or financial purposes. If you wish to plan for both these situations, you will need to create two POAs, one for each necessity.
A medical or health care Power of Attorney can be set up so that a trusted friend, family member, or third party can make important decisions about your wellbeing should you suffer any health complications. This permits them to accept or reject treatment options offered to you according to your predetermined wishes.
This is quite different from a financially focused Durable POA. This kind of document instead allows a trusted person to make choices regarding your financial best interests.
If you have become incapacitated due to old age or disability, your agent will be able to help by approving transactions and collecting any benefits or state aid you are entitled to for you, amongst other things.
How To Grant or Remove a Durable Power of Attorney
When considering how to use a Durable Power of Attorney it is essential to understand how these legal instruments are granted and revoked. As they are designed to function during incapacity, there are some important elements to be aware of.
When writing a Durable POA you will normally have to stipulate when it comes into effect. This can either be when you are declared incapacitated by a medical professional, or on a specified date, which can be or in the future.
It is important to bear in mind that once you have signed the Power of Attorney it is assumed to have come into effect immediately unless clearly stated otherwise on the document. The signing will also need to be notarized in most states.
If for any reason the Durable Power of Attorney has to be revoked how it is removed will depend entirely on whether you are already incapacitated or not. If you are still mentally competent to make decisions for yourself you can simply revoke the document at any time as your authority can override the POA itself.
On the other hand, if you are already incapacitated and the document needs to be revoked, a concerned friend or family member will need to ask the agent to resign in writing. If they refuse it might become necessary to seek legal advice from an estate planning lawyer and take the matter to court.