Durable Power of Attorney And Estate Planning
One of the most important and powerful Advance Directive documents that you can create as a part of your estate planning is a Durable Power of Attorney.
In any type of Power of Attorney the "principal", the person who is granting the Power of Attorney (POA), names an "agent" who is the person authorized to act on behalf of the principal.
What makes a Durable Power of Attorney different than any other Power of Attorney is that the agent can carry on the principal's affairs such as paying the mortgage or rent as well as any other monthly expenses, including utility bills, auto insurance, and health insurance payments after the principal becomes incapacitated. With a Durable POA, the agent would also have the authority to use your money and assets to pay for the principal's medical expenses.
Springing vs Durable Power of Attorney
One important difference between a Durable and a Springing Power of Attorney is that the Durable POA is in effect immediately after it is executed and remains in effect after the principal becomes incapacitated, whereas a Springing Power of Attorney only goes into effect if and when the principal the becomes incapacitated.
A Durable POA can save your family and loved ones from having to go to court in order to gain the right to act as your agent in your place.
What Happens to My Estate If I Don't Have a Durable Power of Attorney?
If you don't have a Durable POA in place, your family or agent will most likely have go to court to gain guardianship over you, and in most cases you would need to be there whether you are aware of what is happening or not. Before a final determination is made on whether your chosen family member or agent can gain guardianship over you and your estate, the court will appoint a temporary guardian which most likely will not be anyone who you or your family knows. The judge will ultimately decide whether your family member or caretaker can be your guardian or if they will want to assign their own choice of third party individual to act on your behalf.
But know that this entire ordeal can be avoided if you have a legal, Durable or Springing Power of attorney. Another thing to consider is that you have to be of sound mind to sign a Durable POA. You would not be allowed to sign a Durable POA if you develop dementia-related condition.
Are a Durable and a Medical Power of Attorney the Same?
This is an important distinction you should be aware of. While a Durable Power of Attorney grants an agent the power to access and operate the principal's finances and property and make any financial decisions, it does not grant an agent the authority to make medical decisions on behalf of the principal.
A Medical Power of Attorney would need to be created so that you can designate a person, who would be known as your Health Care Proxy (Proxy), to make medical decisions on your behalf. Additionally, you can also designate what types of medical treatment you would, or wouldn't want, in a given scenario such as whether to continue life support or have a potentially risky medical procedure performed.
Can your Durable and Medical Power of Attorney Name the Same Person?
One thing you may want to consider is having the same person be both your agent under a Durable Power of Attorney and your Health Care Proxy under a Medical Power of Attorney to make medical and financial decisions on your behalf. This could avoid a situation where an expensive medical procedure could save, prolong, or increase your quality of life is approved of by your health care proxy but your agent under your Durable POA does not want to release the funds or sell off your home or some of your assets for such a procedure.
This can also apply to decisions involving long term care such as whether you would go on Medicaid, hire a home health care aide, or to take up residence in a nursing home or assisted living residence.
Choosing Your Power of Attorney
Choosing a Durable Power of Attorney Agent is one of the most important estate planning decisions you can make. You want to make sure this is a person you can trust to make decisions in your best interest, and according to your wishes, when you are not in a position to do so yourself.
It would be helpful to select an agent who has legal or financial experience or is capable of understanding the dynamics involved in managing your affairs. You may wish to select a spouse or family member to be your agent as well.
Contact an Estate Planning Attorney
If you are considering drawing up a Durable Power Of Attorney but not sure who to select, an experienced Estate Planning Attorney could assist you in making such a decision. An experienced Estate Planning Attorney knows of many possible scenarios that could arise. This could help you to decide who the best fit would be to act as your agent.
Can I use forms available over the internet to create a Durable POA?
Online forms are available to create a Durable POA but it is not recommended that you do so. All Durable Power of Attorney forms will have some things in common but they may not take into account how the provisions of Durable POA will vary according to state law.
Also, a Durable POA is not a one size fits all type of document. You may have some particular wishes regarding your property, or a family member's education that you may want to take precedence. Drawing up a Durable Power of Attorney in this manner runs the risk of having the document invalidated under state law. This could result in a court appointed guardian or conservator to oversee your finances.
Attorney and founder of Jelks Law , Amanda Jelks, strongly recommends against any type of DIY Estate Planning.
Contact an experienced Attorney Today!
A qualified estate planning attorney will know the right questions to ask you so that you can create a Durable Power of Attorney that suits your needs and offers you peace of mind in a worst case scenario.
If you have questions on creating a Power of Attorney, Durable POA, or anything related to estate planning, call Jelks Law today.