The demand for durable powers of attorney is on the rise with the need for wealth management and diversification. A fully integrated estate plan will deal largely with end of life decisions, but it should also plan for unexpected events and your later years. A durable power of attorney should be executed as part of your estate plan so in the event you are unable to properly care for yourself or your property someone you trust will be in position to handle your personal affairs. In fact, it is called “durable” because it will remain effective even after you lose capacity.
A durable power of attorney documents the powers you give to your agent to act on your behalf. These powers can include paying your bills, managing your property, executing estate planning documents, filing taxes, etc. When your agent has to act on your behalf, the durable power of attorney is proof to third parties that they are authorized to carry out the task. With this document handy your agent can avoid obstacles to getting the job done.
Instead of a one size fits all approach, your durable power of attorney can be drafted for your specific needs. You can define the scope of what it can be used for and the powers given to your agent. While some durable powers of attorney include very broad powers, you can limit them. You can also decide whether it is effective immediately or springs into effect later. Should circumstances change, you can revoke your durable power of attorney at any time.
Without a durable power of attorney you and your loved ones may face several difficulties paying your bills, coordinating your living accommodations, and managing your assets. Familial relationships, such as between you and a spouse or your children, is often not enough for third parties to let your family member act for you without a durable power of attorney. In the event your family could be forced to file for a conservatorship. Under a conservatorship, the court has the power to designate a “conservator,” a person to act for you, and the court supervises the conservatorship for its entire duration. The conservatorship process is long, expensive, public, and frustrating. Moreover, because court hearing dates are set several weeks in advance, any immediate need for your family to act on your behalf is severely compromised.
If you already have a durable power of attorney, keep in mind that it should be updated from time to time. You need to make sure that the agent listed on your power of attorney is still who you want handling your personal affairs. You also need to review your agent’s powers to ensure they cover all of your needs or eliminate powers that are no longer relevant. Even if your durable power of attorney is exactly as you want it, many financial institutions and county offices will not accept your document if it was executed too long ago or if it is not the original. You should work with an estate planning attorney to make sure that your durable power of attorney is still fit for you and honored by third parties.