Uncertainties and dangers abound in life. Knowing this unavoidable truth, it’s up to you to prepare for incapacitation. Specific legal documents can help you manage your affairs in worst-case scenarios, which include a durable power of attorney (DPOA).
A durable POA is similar to a nondurable POA in granting authority to an “agent” or “attorney-in-fact” to make appropriate decisions on your behalf. The only difference is their termination. A POA is “durable” because it doesn’t end even when you, the “principal”, become incapacitated. It could only end if you revoke it, your appointed agent becomes unavailable without an alternate on standby, a court invalidates your document, a divorce or your death.
Therefore, given significant points to consider, it will help to understand how DPOA suits your needs.
Who can be your agent or attorney-in-fact?
The first crucial decision regarding a DPOA is determining which competent person will receive the authority. No special qualifications exist, and the designated individual doesn’t need to be an actual lawyer. It may be someone, like a friend or a family member, you trust enough to act within the DPOA’s guidelines.
Additionally, you may also want to choose someone geographically near your location for practical reasons. Having an alternate agent or attorney-in-fact may also prove invaluable if your appointed individual becomes unavailable for a reason, like a severe illness or death.
What are the types of DPOA?
You can have two types of DPOA: one for health care and the other for finances. A health care DPOA has an attorney-in-fact, or a health care proxy, to make medical decisions when you can no longer independently communicate them.
Similarly, a financial DPOA manages your finances on your behalf. Here are some of the tasks your financial attorney-in-fact may conduct:
- Payment of bills, taxes and other expenses
- Operation of your business
- Management of bank transactions and real estate assets
- Collection of Social Security, retirement and other government benefits
You must also note that if you’re helping an elderly loved one in establishing their durable power of attorney, they must have a sound mental capacity during the process.
For your final days
A durable power of attorney is just a portion of all the legal documents you must secure for estate planning purposes. Since the paperwork may prove tedious, it will help to have a legal team on board to ensure your wishes’ execution will be how you intended them to be.