Durable General Power Of Attorney
A Durable General Power Of Attorney is a written legal document authorizing someone you name as your "agent" (also referred to as "attorney-in-fact") to make financial and business decisions on your behalf. It normally grants broad powers to whomever you designate as your agent; however, you can limit those powers if you so wish.
Why Do I Need A Durable General Power Of Attorney?
If you were to become incapacitated, who would take care of life's daily responsibilities for you? Life will go on and the mail still needs to be opened and bills need to be paid. Granted, if you are married, your spouse can carry on, but what if he/she needs to sell a car or refinance the house? If it is in both your names, it is likely that your spouse will have to go to court to have a guardian appointed for you. Guardianship proceeding are expensive and time consuming, and it gives you no control over who will be appointed as your guardian or what your guardian will be permitted to do.
The Durable General Power of Attorney permits you to decide who will be able to act on your behalf if you become incapacitated or choose to have that person handle your affairs for you.
Who Should Be Your Agent?
Generally, you can appoint any competent adult to be your attorney-in-fact, although you should first determine whether that individual is willing to serve such a role beforehand. Most people choose someone who knows them well, cares about them, and someone they can trust. Most likely this will be your spouse, a close family member or perhaps a close friend. It is also wise to name a successor agent in case the person you name as agent becomes unavailable or unable to act when the time comes.
What Is The Difference Between A Durable Power Of Attorney And One That Is Nondurable?
A Durable Power of Attorney will continue to be in effect after you become incapacitated. Whereas, the powers granted in a Nondurable Power of Attorney terminate once you become incapacitated.
Some states treat a Power of Attorney that is not designated as "Durable" to be nondurable and other states, such as Pennsylvania, treat all non-designated Powers of Attorney as durable. Accordingly, it is best to ensure that your intentions, whether the powers you grant are durable or nondurable, are clearly stated in the Power of Attorney.
Why Do I Need A Durable Power Of Attorney Now?
Once you become mentally incapacitated, it will be too late to grant a Power of Attorney. One of the requirements in granting powers is that you are mentally competent. A Power of Attorney controls what happens to you and your assets when an unforeseen incident prevents you from acting on your own accord, whether it's temporary or permanent. In this respect, a Durable Power of Attorney is more important than a Will, since the Power of Attorney controls what happens to you while you are alive.
What If I Don't Want To Grant Such Broad Powers?
The Power of Attorney is an extremely versatile legal planning device. As mentioned previously, the powers granted can be durable or nondurable. In addition, the powers can be delayed until some future date or occurrence. This is known as a "Springing Power of Attorney." A Springing Power of Attorney is commonly used when a person does not want to grant powers until they become incapacitated. When used in this manner, the powers "spring" into effect once the grantor actually does become incapacitated.
You can further limit the powers granted by limiting the powers to certain transactions or time periods. Such a "Special Power of Attorney" is extremely useful to handle transactions while you are traveling or when you have commitments that prevent you from handling your affairs. Often, a "Special Power of Attorney" is used in the sale of a residence; but it can be used in almost any situation, such as entering safety deposit boxes, managing business interests, collecting debts, and buying and selling securities.
You can also use a "Special Power of Attorney" to authorize someone else to take care of your child's needs on a temporary basis while you are traveling. In this circumstance, you may grant powers to the person caring for your child, while you are away, to make emergency medical decisions on your child's behalf in case you can not be reached. Generally, these powers are granted for a limited time period and can be as broad or limited as you feel prudent.
Can I Revoke My Power Of Attorney?
Yes! Circumstances do change and you may revoke a Power of Attorney at any time. All you need to do is give written notice to the person you selected as your agent that you are revoking your Power of Attorney. It is also wise to have your agent return the original Power of Attorney and to notify all parties that you believe may rely on such documents.