Did you know that a general power-of-attorney document is null and void if you become incapacitated or mentally incompetent?
That’s right – when you’re unable to make your own decisions, a power of attorney document must include the term “durable” to show your intent and remain in effect.
First, it’s important to understand the legal terms. The person authorizing someone else to act on their behalf is known as the principal, grantor or donor.
The person receiving the power of attorney is called the agent or attorney-in-fact and is legally permitted to act on behalf of the principal, grantor or donor. (For the purposes of this article, the terms “principal” and “agent” will be used).
Choosing A Good Agent
It should go without saying that trust is a priority. Your agent should be a trusted relative, friend, attorney, or organization, who will honor your wishes and never abuse their powers.
Before you choose an agent, have a heart-to-heart discussion with them to ensure they welcome the responsibility of making decisions for you.
With a comprehensive, Durable Power of Attorney, you can direct your agent to make specific decisions about your property, finances, investments, paying your bills, and sign documents on your behalf. You can also specifically restrict or limit some of these powers.
According to law, your agent can never create your Will, revoke or makes changes to your Will, or vote in public elections on your behalf.
Make sure you list at least one “successor agent” who can step up if or when your first choice is unable to serve in their role.
Benefits Of A Durable Power Of Attorney (DPOA)
Eliminates the need for a court-appointed guardianship or conservatorship to protect the principal. Without a DPOA, a court must appoint a guardian or conservator if you become incapacitated or mentally incompetent. Court proceedings can become time-consuming, costly, and you have no control over who is chosen to handle your affairs.
Prevents questions about your wishes and intent. A well-drafted DPOA, properly signed, witnessed and notarized, provides legal evidence of your intentions and makes it difficult for others to challenge or dispute them.
Enables your agent to talk to agencies and organizations on your behalf. When you’re incapacitated, a wide number of issues can arise. A DPOA enables your agent to communicate with your insurance companies, banks, and other service providers. Without one, companies and organizations will not disclose or discuss your information. A DPOA also enables your agent to apply for government benefits on your behalf.
Provides your agent with immediate access to funds. When you’re incapacitated, there are still bills and other expenses that need to be paid promptly. A DPOA enables your agent to access your funds and other assets. Otherwise your spouse or family members will have to go to court to seek permission.
Provides an opportunity to discuss your intentions with family members. In addition to the person you choose as your agent, a DPOA opens discussions about your wishes and helps keep family conflict down to minimum.
Though most state websites have DPOA forms you can download and complete yourself, it’s wise to have an attorney review your do-it-yourself effort to look for mistakes. Also check to see if your state requires you to file a DPOA with your county land records office.
A DPOA must be signed by you and two qualified witnesses. It’s also a good idea to have the document notarized.
Remember – a DPOA is not just for old folks. In fact, legal experts advise that everyone over the age of 18 should have one.
