As we age, planning for the future and making decisions that will protect our interests and assets becomes increasingly important. October is National Estate Planning Awareness Month, so we’re highlighting a powerful estate planning tool, the Durable Power of Attorney (DPOA).
A Durable POA is a legal document that gives another person the power to act on your behalf when you cannot do so yourself. This article will discuss what a Durable Power of Attorney is, why it is essential to have one, and how it can benefit you in the long run.
What is a Durable Power of Attorney?
A Durable Power of Attorney (DPOA) is a legal document that appoints another person or persons to act as your agent or attorney-in-fact. This person will have the authority to make financial, legal, and medical decisions on your behalf when you cannot do so yourself. The DPOA document can be limited in scope or broad enough to cover all aspects of decision-making.
Why is a Durable Power of Attorney important?
Having a Durable Power of Attorney is important for several reasons:
- It allows you to choose who will make decisions for you in case of incapacity or disability.
- It ensures that someone you trust is handling your financial and legal matters rather than a court-appointed guardian or conservator.
- It can save your loved ones time, money, and stress by avoiding the need for a costly and time-consuming guardianship or conservatorship proceeding.
- It gives you control over your future and ensures that your wishes are carried out, even if you are unable to communicate them yourself.
How can a Durable Power of Attorney benefit you?
Having a Durable Power of Attorney in place can bring peace of mind and provide numerous benefits, including:
- Allows for continuity in decision-making: The designated agent has the authority to act on your behalf immediately without delay, ensuring that your financial and legal matters are promptly addressed.
- Ensures your wishes are respected: By appointing a trusted individual as your agent, you can ensure that they will follow your instructions and make decisions in line with your interests and values.
- Protects against fraud and abuse: A Durable Power of Attorney allows you to choose someone you trust to handle your financial and legal affairs, reducing the risk of fraud or abuse by outside parties.
- Saves time and money: As mentioned earlier, having a Durable Power of Attorney in place can save your loved ones from having to go through the lengthy and expensive process of obtaining a guardianship or conservatorship. This also helps avoid potential conflict among family members over who should make decisions on your behalf.
Additional Tips for Estate Planning
In addition to a Durable Power of Attorney, there are other important documents that should be included in your estate plan. These may include a Last Will and Testament, a Living Will or Advance Directive, and a Revocable Trust. It’s also essential to regularly review and update your estate plan as needed, especially after major life events such as marriage, divorce, birth of a child, or changes in financial circumstances.
Conclusion
A Durable Power of Attorney is an essential document for anyone looking to plan for the future and protect their interests. It gives you control over who will make decisions on your behalf, ensures that your wishes are respected, and can save time and money for your loved ones.
Take the time to plan ahead and create a comprehensive estate plan that ensures that your wishes are carried out and your loved ones are taken care of in the event of incapacity or death. Contact National Legal Center today to begin crafting your just right Durable POA.
Durable POA FAQ’s
A Durable Power of Attorney grants enhanced abilities and protection that may not come with a standard Power of Attorney. Discover the difference between a Power of Attorney (POA) and a Durable Power of Attorney (DPOA).
What is a Power of Attorney?
A Power of Attorney (POA) is a document that allows one person to appoint another person to act on their behalf concerning finance, real estate, business, and more.
Who is the Principal?
You are the principal. You are the person who grants authority or decision-making ability to your representative.
Who is the Agent?
The personal representative you appoint on your behalf is called the agent. The agent that you appoint will be able to make decisions for you.
Who is the Alternate?
You are also able to assign up to two alternates. These are individuals who are in succession to act as your agent should your agent be unable or unwilling to act on your behalf.
What is a Durable Power of Attorney (DPOA)?
A Durable Power of Attorney (DPOA) is valid regardless of whether you, the principal, are competent. This validity means it will remain in effect even if you become incapacitated. A Durable Power of Attorney remains in effect until you revoke it or die.
Who should have a Power of Attorney form?
Although many different situations can prompt a person to create a Power of Attorney document, POAs are used to allow someone to act on your behalf when you are not available or capable of acting for yourself. You might want to consider making a POA if:
- You travel out of the country often.
- You work in a hazardous work environment.
- You are diagnosed with a severe illness.
- You have a business or property that needs maintenance when you’re unavailable.
- You have children who would need to be provided for if you were to become incapacitated.
- You want a specific person to be responsible for your affairs.
- You want a specific person to uphold your rules about how you run your business, property, or life.
- You are approaching old age and would like to designate a representative for yourself.
A Power of Attorney is critical to have in the event of unforeseen circumstances and, thus, is often a key document in one’s estate plan. For example, if you suddenly become ill or are involved in a serious accident, having a Durable Power of Attorney in place will allow your agent to manage your affairs until you are better.
What powers can you grant to your agent?
Not all Power of Attorney documents grant the same level of power. Our Durable Power of Attorney is designed to grant the powers needed for your agent to act on your behalf. Some examples include:
- Finance: You can give your agent the power to make financial decisions, like making payments or closing your accounts, in your absence. Your agent can also hold other financial powers, including the ability to control your bank account, cash checks, or transfer funds.
- Legal: A Power of Attorney can allow your agent to handle your legal matters. This ability means they can commence lawsuits, communicate with your lawyer, file documents with the court, and more.
- Real estate: Your agent can handle all your real estate responsibilities. This ability includes selling, renting, or managing any personal, residential, and commercial properties owned or leased in your name.
- Business: Your agent can manage your business, including making employment, budgetary, and investment decisions on your behalf. They can also be your proxy in meetings and vote as a shareholder in your absence.
Are any other powers granted to my agent?
Yes! Our Durable Power of Attorney was drafted with the intent of ensuring that your agent can act on your behalf for both large and small decisions alike. Some examples of more day-to-day powers granted are:
- Maintaining your family (e.g., paying for your children’s tuition or medical expenses)
- Hiring professionals (e.g., hiring a maintenance specialist)
- Handling government tax requirements and benefits (e.g., filing and paying your personal or corporate taxes)
- Selling, purchasing, or exchanging goods (e.g., selling your furniture or buying new furniture)
- Donating to charities
- Gifting money or items to family and friends
- Making insurance-related transactions (e.g., canceling your home or apartment insurance)
- Changing retirement plans and accepting benefits (e.g., using your pension to pay bills like your mortgage)
How should I choose an agent?
To choose an agent, you must consider your options carefully. Aside from your personal preferences, there are also legal requirements for who you select.
Your agent should not:
- Be under the age of majority in your state;
- Be in a state of bankruptcy;
- Be the owner or employee of a care home where the principal resides or receives treatment.
You also want to make sure that you have spoken at length with your agent regarding your wishes and how they should proceed when making decisions on your behalf. Your agent should make decisions based on what you would do or how you would decide, even if they or others would act differently.
Does a Power of Attorney need to be notarized?
Yes. Our Durable Power of Attorney must be notarized, and a witness must sign as well. Your bank may be able to notarize your document for free. National Legal Center can facilitate the notarization of the document for an additional fee.
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