Monday, March 9, 2015

What is a Durable Power of Attorney?

A durable power of attorney is a means of granting someone else legal designation in handling matters such as your health, finances, or legal issues with the same authority that you hold yourself.  As it applies to estate planning, a durable power of attorney is often the preferred means of incapacity planning. It is a written document that remains valid in the event that you are later unable to make your own decisions on any subject. This may include situations such as mental or physical incapacity.

There are two types of ways to implement a durable power of attorney. A general durable power of attorney allows the designated individual to do every act that may be legally performed by you. A limited durable power of attorney only covers specific events or situations. You may use more than one to cover different situations. For instance, you may have one individual designated to handle your financial matters while another handles your health care decisions.

In addition to choosing between a general durable power of attorney and a limited durable power of attorney, you may also decide whether you want to grant control of responsibilities to the designated individual immediately, or in the event of incapacity. A durable power of attorney not only allows you to grant control to another person, but also to choose when that control is transferred over.



Considerations to Make

The most important consideration to make when filing for a durable power of attorney is the decision of who you will grant authority to in making such decisions on your behalf. It’s important to consider the gravity of the decisions your agent will be responsible for making as well as their own personal responsibility with making such decisions in the first place. It is possible you may not trust one single individual with handling all of your responsibilities. In the event you become incapacitated, one person may be the best at handling financial matters while another may better consider your health care. Fortunately, you do have the power to grant limited powers to multiple individuals. This is one of the greatest benefits of a durable power of attorney.

Other considerations include discussing with your agent how certain matters should be handled so that they may act accordingly if disaster strikes. Additionally, it’s crucial that you evaluate your entire estate including property and other assets before having this discussion and also make the individual aware of any health concerns you might have that could cause issues down the line resulting in their need to make decisions for you. All of this is essential in preparing your trusted individual with handling your personal matters and making the correct decisions in the event that you become unable to do so yourself.

Often times, individuals may be uncertain if a durable power of attorney is right for them. The truth is that if you know someone with whom you can trust granting the responsibility and you hold a large value of assets, there is no reason not to be prepared for the unexpected. While usually older individuals consider the benefits more than younger persons due to such expected problems as the onset of Alzheimer’s disease or other afflictions, freak occurrences such as an incapacitating car crash can also cause a situation where a durable power of attorney may be useful in managing the person’s health care and finances. This type of situation can happen to anyone, regardless of age.

It’s also important to consider that if you suspect a certain situation may arise, such as through having symptoms of the early onset of mental or physical problems, if you haven’t established a durable power of attorney, you best file one as soon as possible. There are certain situations that may prevent an individual that is experiencing mental or physical disabilities from establishing a durable power of attorney later on. For example, in the late stages of Alzheimer’s disease, an individual will likely be unable to establish a durable power of attorney due to the fact that they will be found to not be “of sound mind” and therefore unable to appoint a power of attorney to manage their affairs. This situation can be a nightmare for all parties involved if there was no proper planning in advance for potential incapacity.

Finally, it’s important to note that while not having an incapacity plan include a durable power of attorney will not automatically mean you will not be taken care of, it is a way of ensuring that you are taken care of in the manner of your choosing along with management of your assets. If you can no longer make financial or health care decisions for yourself, the state will usually appoint someone for you if you haven’t planned ahead. While they do seek to appoint an individual that will manage these matters to your own benefit, there is no guarantee your wishes will be fulfilled and you would have no means of control. Being proactive ensures you the best chance of having your situation handled correctly.

Conclusion

In conclusion, a durable power of attorney is a great way to protect yourself and your assets in the event of incapacity. The first step to establishing a properly drafted durable power of attorney is consultation with a trusted legal professional that will ensure your paperwork is filed correctly and that you make all necessary considerations during the process.

Dwight Tompkins is an estate planning attorney with years of experience in such matters as durable powers of attorney. For questions, or to schedule a consultation, call the office today at 714 385 0044.

Grant yourself the peace of mind in knowing that your health, financial, and legal matters are handled in the event that you are unable to yourself. Contact Dwight Tompkins today!

1 comment:

  1. In addition to having a Limited or Durable POA, other documents such as a Living Will and Living Trust are invaluable to handling estate planning. This applies even more importantly to elderly relatives as they often times have not updated wills, etc.

    Pre-planning for estate handling applies to both pre-death and post-death situations and simplifies the handling of virtually all associated events.

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