When you give someone power of attorney, it allows that person to make certain decisions for you. Those decisions can be legal, financial, or medical. There are many different kinds of powers of attorney, each with its strengths and limitations.
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For a general power of attorney, the legal power of the agent (the person you appoint) ends when you are no longer able to make your own decisions. This happens if you are incapacitated or deemed legally incompetent. However, with a durable power of attorney agreement, this limit does not exist.
If you are making plans for an emergency or your end-of-life care, you may be interested in appointing a loved one to make decisions for you when you are no longer in a state to do so for yourself. If this is the case, then a durable power of attorney could be your best option.
What Are the Types of Durable Power of Attorney?
People appoint a power of attorney for many reasons, but durable powers of attorney tend to fall into two categories: healthcare decisions and financial decisions.
Healthcare Durable Power of Attorney
A healthcare durable power of attorney is the type of power of attorney that allows the agent (your appointed representative) to make medical decisions for you if you are unable to do so for yourself.
Through a durable power of attorney, your health care representative can:
- Speak with doctors to discuss options for healthcare and make a decision
- Receive updates about your private medical information
- Uphold any advanced directives that you have put forth in regards to your medical care. These can include refusing treatment or taking measures to prolong life.
A health care durable power of attorney is meant to have your best interests at heart when making your medical decisions, and many people choose close family or friends for this role.
Financial Durable Power of Attorney
A financial durable power of attorney allows your agent to make financial decisions for you, even when you become incapacitated or are deemed unable to make decisions for yourself. There are many key functions a financial power of attorney can serve, including:
- Paying your bills, taxes, and medical expenses on time
- Managing your investment accounts, real estate assets, and retirement funds
- Running your small business in your absence
A financial power of attorney can help to ensure that your savings, investments, and livelihood remain safe when you are unable to maintain them.
What Are Reasons To Establish a Durable Power of Attorney?
While many people may think that a power of attorney is something you only need to think about as you make end-of-life plans in your old age, that is not the case. The truth is that people of all ages can benefit from establishing a durable power of attorney.
You can establish a durable power of attorney to:
- Prepare for an unforeseen accident or illness
- Establish a legal connection with a close friend or partner
- Provide financial safety for your children in the event of your death or incapacitation
Your choice of healthcare or financial durable power of attorney will depend on your specific needs. Many people create both powers of attorney as part of their estate plans.
Reasons To Establish a Healthcare Durable Power of Attorney
There are many reasons to establish a healthcare durable power of attorney. If you have recently been diagnosed with an illness that may lead to an inability to make decisions for yourself (such as dementia or a brain tumor), then appointing a power of attorney is necessary to avoid a court-appointed guardian.
If you are not married, but you have a close friend or romantic partner to whom you want to give the power to make decisions for you, then a healthcare durable power of attorney is important. It gives your partner rights they normally wouldn’t have because they aren’t legally your spouse.
For some people, there is no pressing medical reason for establishing a power of attorney. However, just because it isn’t pressing doesn’t mean you should wait to create a healthcare power of attorney until you are sick. If you want to be the one in control of what happens to you when you are incapacitated, you should consider creating a durable healthcare power of attorney now, while you are healthy and of sound mind.
Reasons To Establish a Financial Durable Power of Attorney
The main reason to establish a financial durable power of attorney is to keep your finances safe if you are unable to manage them yourself. This includes:
- Paying your bills and taxes.
- Managing your real estate.
- Completing financial transactions while you are out of the country.
- Managing your investments.
- Transferring or selling your property/assets.
Financial powers of attorney are also important for business owners. You have worked very hard to grow your business, diversify your investments, buy real estate assets, and more. A financial power of attorney agent would make sure payments were made on time and business operations were up and running in your absence.
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How Do You Select a Durable Power of Attorney Agent?
There is a lot that goes into choosing a person to assume power of attorney. Depending on where you are in life and what your family dynamics are, you may be trying to choose between one of your children, one of your parents, or even between a couple of your close friends. It is important that you choose a loved one who can act in your best interests and somebody that you trust.
Whoever you choose, make sure that they understand what you are asking of them. You can create a plan with your preferences for them to follow (like an advanced healthcare directive), but there might be situations where they have to act on their own in your best interest.
How Do You Establish a Durable Power of Attorney?
For many people, establishing a durable power of attorney is not too complicated. You can find simple forms for a reasonable price. Depending on your specific situation, you may not even need a lawyer to establish a durable power of attorney.
It is important to note that a power of attorney has to be established while you are still able to make decisions for yourself. You must be legally competent, and the form usually has to be signed, witnessed, and notarized. Once everything is filled out, it can be filed with the appropriate courts and put into effect.
Every state has different rules and phrasing regarding power of attorney. While the general process is the same, there may be specific requirements and terminology you need to be aware of depending on where you live.
When Does a Durable Power of Attorney End?
A durable power of attorney does have some limits. It can be ended under specific circumstances. For example, you can end a durable power of attorney yourself if needed. There are also situations where a durable power of attorney can be ended by an outside party.
Removing a Durable Power of Attorney
You can remove the durable power of attorney yourself if you feel like the person you appointed is no longer the right person for the job. In many states, as long as you are still of sound mind, you can verbally revoke the power of attorney by telling the agent that you no longer wish for them to be able to make decisions on your behalf.
You can also remove the durable power of attorney in writing. By signing a letter stating the removal in front of a notary public and sending it to your agent, you can end the durable power of attorney.
There are many reasons for removing a durable power of attorney, many of which are private and personal family matters. Whatever your reasoning, make sure that you are thoroughly familiar with everything you need to do to revoke the legal power from your agent.