When we do estate planning for our clients, there are four basic documents that most folks need: a will, living will, health care proxy, and durable power of attorney. In later blogs I will deal with these individually, but here I would like to define and address the latter: the durable power of attorney.
This document comes into play when a person is unable to either perform legal duties due to physical limitations, or is mentally incapable or unwilling to make decisions for his or her benefit. Real estate transactions, banking needs, and a vast plethora of legal obligations may be utilized with this document. Essentially, you are giving another individual the power to sign for you, transact business, control your finances and make decisions for you.
The power in the document is general, as opposed to a ‘limited power f attorney” where the powers’ are limited to a certain transaction or are closely defined, allowing the individual to perform tasks specific to those noted on the document.
The powers can be immediate or “springing” meaning that they come into power in a certain time or circumstance: hence, they “spring into action” based on the specifics of the document. A durable power of attorney may save the arduous instance of a court appointed conservatorship, which may be cumbersome and outside the actual wishes of the disabled grantor. However, a court appointed conservatorship is supervised by the court.
Significant powers may be granted under a power of attorney, Essentially, you are giving another individual the right to sign for you and may have access to your money, deeds or other legal documents. Before entering into this or any legal agreement, be sure to consult a qualified attorney to see if the arrangement is applicable to you, your state regulations, and in your best interest.
