A Power of Attorney (POA) authorizes another person to handle certain matters, such as finances or health care, on your behalf. If a power of attorney is durable, it remains in effect if you become incapacitated, for example, due to illness or injury.
Durable powers of attorney help you plan for medical emergencies and decline in mental functioning and can ensure your finances are taken into account. Having these documents in place helps eliminate confusion and uncertainty when family members have to make difficult medical decisions.
Power of Attorney vs. Durable Power of Attorney
A power of attorney allows another person to manage your legal, financial, or medical affairs. General powers of attorney cover a wide range of transactions, while limited powers of attorney only cover specific situations, such as authorizing a car dealership to register your new vehicle for you.
An ordinary power of attorney expires if you become mentally incompetent, while a durable power of attorney includes special wording that makes it effective even if you do.
The purpose of a durable power of attorney is to plan for medical emergencies, cognitive decline later in life, or other situations in which decisions can no longer be made by you.
General Durable Power of Attorney Definition
A general durable power of attorney authorizes someone to act on a wide range of legal and business matters and remains in effect even if you are incapacitated. The document is also known as a durable power of attorney for finances. The POA can take effect immediately if you are disabled.
The nominated person is known as your agent or attorney-in-fact, although the person or company does not have to be an attorney. An attorney-in-fact can handle many types of transactions, including:
- Buying and selling of real estate
- Management of bank accounts, bills, and investments.
- Filing of tax returns
- Apply for government benefits
If you become incapacitated and don’t have a durable power of attorney, your family may have to go to court and find you incompetent before they can take care of your finances for you. So it’s a good idea to have one in place, just in case.
Durable Power of Attorney for Healthcare
A durable healthcare power of attorney is useful when a medical emergency leaves you unconscious or unable to make decisions about your care. Designates someone else to communicate with doctors and make medical decisions for you.
This document is different from a living will, which describes the treatment you want if you are at the end of your life and can no longer communicate. A healthcare power of attorney, on the other hand, appoints someone to make medical decisions whenever you are unable to do so for yourself, even if you are expected to make a full recovery.
Obtain and Remove a POA
You can find a DIY durable power of attorney form online. However, it is helpful to speak to an attorney about your estate planning needs so they can recommend documents that will work best for your particular situation.
If you have a power of attorney for someone else, bring a certified copy of the document with you when conducting business or communicating with healthcare professionals. If you are signing documents as a power of attorney, use your name and then indicate that you are signing as a power of attorney.
You can revoke your power of attorney at any time as long as you are mentally competent. You have to do this in writing. It is also a good idea to notify financial institutions and other businesses your attorney-in-fact has dealt with.
The question of who can cancel a loved one’s power of attorney is more difficult. If you believe someone is abusing your position as power of attorney, you may be able to take legal action to remove them. An attorney with experience in both estate planning and elder law can help.
Protect your finances with a Durable Power of Attorney, by clicking here.