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What is a Durable Power of Attorney?
A power of attorney is a document that allows you to give someone the authority to manage your financial affairs. This person is called your agent. Your agent can take care of your financial affairs as long as you are competent.
A "durable" power of attorney is a power of attorney that remains in effect when you are unable to make your own financial decisions (no longer competent). If you want your agent to have authority when you are unable to make your own financial decisions, your power of attorney document must be durable. This is done by adding a clause to the document that makes it clear that you intend for this power of attorney to remain effective after your subsequent disability, incapacity, or by the lapse of time.
What can Your Agent do?
An agent can:
- sign your checks
- make deposits for you
- pay your bills
- contract for medical or other professional services
- sell your property
- get insurance for you
- do all the things you do to manage your everyday affairs
You can give your agent authority to do anything you could do. Or, you can limit your agent's authority to do only certain things, such as sell your home.
How do I Make Sure My Durable Power of Attorney is Valid?
You must sign the durable power of attorney before you become unable to do so (incapacitated) or it will not be valid. If you are incapacitated, it means you have a mental or physical condition that prevents you from taking care of your own financial affairs. You must sign your durable power of attorney in front of a notary or two witnesses. Also, your agent must sign an acknowledgement of responsibilities and duties before exercising authority. The law sets forth the language that must be included in an acknowledgement of responsibilities and duties.
Why do I Need a Durable Power of Attorney if My Spouse and I Own Everything Jointly?
If you and your spouse own a bank account jointly, then your spouse can sign checks and withdraw money from your joint bank accounts whether you are able to or not. However, the same is not true about your jointly owned stock or home. Your spouse needs your consent and signature in order to make changes to the legal title of your jointly owned home or stock. Your spouse does not have legal authority to name or change a beneficiary on your life insurance or retirement benefits either. To provide your consent and signature to these legal transactions after your disability or incapacity, your spouse must be named as your agent under a durable power of attorney.
May I Make a Durable Power of Attorney That is Effective Immediately?
Yes, a durable power of attorney may express your intent to make it effective immediately.
Can I Make a Durable Power of Attorney That Becomes Effective Only if I Become Incapacitated?
Yes, a durable power may express your intent to make it effective upon your disability or incapacity. You should also explain in the document how you would like your disability or incapacity determined.
How Do I Cancel a Durable Power of Attorney?
You can cancel (revoke) your durable power of attorney, but only when you are able (competent). You must sign a written document that says the durable power of attorney is revoked. You should sign the document in front of a notary public or two witnesses, but that is not required. Deliver your signed document to your agent and to anyone with whom your agent is dealing (for example, your bank).
Whom Should I Name as My Agent?
You may name any adult or a bank as your agent. You should have trust and confidence in whomever you select. Your agent should be willing to do this job for you.
Can I Name More Than One Agent?
You can name more than one agent to act at the same time. Include in your durable power of attorney whether the agents will act separately or as one. You should also name successor agents who will act if your agent becomes unavailable or unwilling to act on your behalf.
What are the Agent's Duties?
Your agent must follow your instructions and act in your best interest. The agent must keep receipts and accurate records about your assets. The agent must keep a record of the actions done on your behalf. If you ask your agent to keep you informed of his or her actions, then he or she must do so. If you ask your agent for an accounting, then your agent must provide you with one.
What if My Agent Abuses the Authority?
Anyone interested in your welfare can ask the probate court to get involved, cancel the durable power of attorney, and either appoint a conservator to handle your affairs or enter some other protective order on your behalf.
