What is a Durable Power of Attorney?
A durable power of attorney allows you to manage your property and financial affairs in the event that you become disabled or incapacitated. Unless you have a properly drafted power of attorney, when you become incapacitated or disabled, it may be necessary to go to court and have a guardian or conservator appointed to make decisions for you. This conservatorship process is usually lengthy and expensive as well as being emotionally draining.
There are two types of durable powers of attorney you should know about: one, a “present” durable power of attorney in which the power is effective immediately; and two, a “springing” or future durable power of attorney that only comes into effect upon your subsequent disability or incapacity as determined by your doctor. If you become incapacitated and are unable to make decisions, the person you have listed to act on your behalf would have the authority to deal directly with third-party financial institutions such as banks.
A durable power of attorney generally has to be signed and notarized and says that it shall be “durable,” which means it will continue in effect after you become incapacitated. It terminates at your death or at any time you specify. You can also cancel it at any time while you are competent. A durable power of attorney’s flexibility is one of its main advantages. You can limit the authority of the agent in the document, giving him or her as many or as few powers over your property and financial affairs as you wish.
Who can establish a Durable Power of Attorney?
Generally, any individual over the age of majority and who is legally competent can establish a power of attorney. Every person of legal age and competency should have one.
Who may act as your Attorney-in-Fact under your Durable Power of Attorney?
When you appoint another individual to make financial decisions on your behalf, that individual is called your “attorney-in-fact.” Most people chose their spouse, domestic partner or adult child as their attorney-in-fact, but a trusted family member, friend or professional colleague may also be a good choice. The person you chose should be someone who is capable of handling your financial affairs and someone you trust. Your attorney-in-fact may be anyone who is legally competent and over the age of majority. You may also appoint more than one attorney-in-fact to serve either simultaneously or separately. Appointing more than one attorney-in-fact to serve simultaneously can be problematic because if any one of them is unavailable, important financial action may be delayed. Confusion and disagreement between co-attorneys-in-fact can also be another cause of problems. Therefore, it is usually more sensible to appoint one individual as the primary attorney-in-fact and nominate additional individuals to serve as alternate attorney-in-fact if your first choice is unwilling or unable to serve.
Creating a durable power of attorney assures that your wishes regarding your financial affairs are carried out exactly as you want them, allows you to decide who will make financial decisions for you, and can be effective immediately or upon your subsequent incapacity or disability.
For more information on preparing your Durable Power of Attorney, and establishing your comprehensive estate plan, contact an experienced estate planning attorney.
I’m attorney Eric Rudolph at (760) 702-4046 and at firstname.lastname@example.org with Your Legal Buzz.
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