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Overview | Durable Power of Attorney

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Durable Power of Attorney

A power of attorney allows you to appoint a loved one, a friend, or a professional advisor to make binding decisions on your behalf. This document may preclude probate court involvement and potential family feuds over who will control your finances and affairs. The person who grants the authority through the power of attorney is the “principal.” The person authorized to act on behalf of the principal is the “agent” or “attorney-in-fact.” The agent has the authority to manage any or all of the principal’s financial and personal affairs. A power of attorney can be as broad or as limited as you wish. Most people cannot anticipate what powers the agent will need to exercise in the future, so the power of attorney should grant broad powers to the agent.

A power of attorney is “durable” if it expressly states that it will remain valid even if the principal subsequently becomes incompetent or disabled. The agent’s authority ceases, however, when (a) the principal dies, (b) a court appoints a conservator for the principal, or (c) the principal revokes the power of attorney.

A durable power of attorney may be written so that it becomes effective as soon as it is signed, or it can become effective only when the principal is certified by a physician as incompetent (a “springing” power of attorney). Although the use of a springing power of attorney may sound attractive, problems can exist when the agent attempts to exercise the power of attorney. Proof of the principal’s incapacity, attested to by the principal’s treating physician, is often required before the springing power of attorney will be honored by financial institutions.

A durable power of attorney is invaluable when important decisions need to be made, but you are incapable of making them yourself. Appointing an agent through your durable power of attorney permits you to control who will manage your affairs if you are unable to manage them yourself.

Whatever type of power of attorney is utilized, you should choose your agent(s) carefully. The power of attorney is a very powerful document that does not involve ongoing court supervision. An alternate agent should be appointed in case the primary agent becomes unable or unwilling to serve.