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What Is a Durable Power of Attorney?
by Jane Haskins, Esq.Freelance writer
A power of attorney (POA) authorizes someone else 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, such as due to illness or an accident.
Durable powers of attorney help you plan for medical emergencies and declines in mental functioning and can ensure that your finances are taken care of. Having these documents in place helps eliminate confusion and uncertainty when family members have to make tough medical decisions.
Power of Attorney vs. Durable Power of Attorney
A power of attorney allows someone else to handle your legal, financial, or medical matters. General powers of attorney cover a wide range of transactions, while limited powers of attorney cover only specific situations, such as authorizing a car dealer 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 that happens.
The purpose of a durable POA is to plan for medical emergencies, cognitive decline later in life, or other situations where you're no longer capable of making decisions.
General Durable Power of Attorney Definition
A general durable power of attorney both authorizes someone to act in 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 or can become effective only if you are incapacitated.
The person you appoint is known as your agent, or attorney-in-fact, although the individual or company doesn't have to be a lawyer. An attorney-in-fact can handle many types of transactions, including:
- Buying and selling property
- Managing bank accounts, bills, and investments
- Filing tax returns
- Applying for government benefits
If you become incapacitated and don't have a general durable power of attorney, your family may have to go to court and have you declared 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 otherwise unable to make choices about your care. It appoints someone else to communicate with doctors and make medical decisions for you.
Such a document differs from an advance directive, or living will, which details 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, names someone to make medical decisions any time you are unable to do it yourself, even if you are expected to make a full recovery.
Obtaining and Removing a Power of Attorney
You can find DIY durable power of attorney forms online. However, it's helpful to talk to an attorney about your estate planning needs so they can recommend the documents that will work best for your particular situation.
If you hold power of attorney for someone else, bring a certified copy of the document with you when you conduct business or communicate with healthcare providers. If you're signing documents as power of attorney, use your name and then indicate that you're signing as power of attorney. Ask about the preferred format before you sign.
You can revoke your power of attorney at any time, as long as you're mentally competent. You should do this in writing. It's also a good idea to notify financial institutions and other businesses that your attorney-in-fact has dealt with.
The question of who can override a power of attorney for a loved one is more difficult. If you believe someone is abusing their position as power of attorney, you may be able to take legal action to have them removed. An attorney with experience in both estate planning and elder law can help.
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