Durable Power of Attorney
What is a power of attorney?
A Power of Attorney (POA) is a legal instrument that delegates an individual’s legal authority to another person. If an individual is incapacitated or mentally incompetent, the POA assigns a trusted party to make decisions on his or her behalf. A nondurable Power of Attorney often comes into play in: real estate transactions, or when someone elects to delegate their financial affairs to an assignee during an extended absence.
What does a durable Power of Attorney allow?
A “durable” Power of Attorney allows an assignee, or Agent, to act on behalf of a second party, or Principal, even after the Principal is not mentally competent or physically able to make decisions. Once a Principal signs (executes) a durable Power of Attorney, it may be used immediately, until it is either revoked by the Principal or the Principal dies.
Can you still make decisions when a durable Power of Attorney goes into effect?
Of course, even after a POA goes into effect, the Principal can still make financial and legal decisions on his or her own. The Principal can also elect to have the POA take effect immediately, not just at a point in the future when they lose the ability to make these decisions. You can also appoint multiple Agents.
Financially, a Power of Attorney is a tremendously useful instrument. An Agent can:
- pay bills,
- write checks,
- make investment decisions,
- buy or sell real estate or other hard assets,
- sign contracts,
- file taxes,
- even arrange the distribution of retirement benefits.
Can you add stipulations?
Of course, a POA can stipulate what an Agent can and can’t do financially. There are some things that are expressly forbidden, no matter what you stipulate.
For example, your Agent can’t use your assets on his or her behalf (which often constitutes elder abuse) or change or write a will. But he or she can establish a trust.
No power without a signature!
Please remember: No Power of Attorney, HCPOA, or Living Will is valid unless it is signed and notarized and/or properly witnessed.
It seems unthinkable that some people would draft these documents and never sign them … but to borrow an analogy, some smoke detectors are bought but never installed.
DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.