So many people come in to see me and are convinced that they need a Durable Power of Attorney (DPOA). When I ask them why, they don’t know. Further probing usually reveals that they aren’t quite sure what a DPOA actually is. Let me see if I can explain the idea.
Simply put, a power of attorney is a legal document where you give power to someone else (your agent) to act on your behalf. It is similar to hiring an attorney. The attorney is your representative and performs acts or conducts affairs on your behalf. Also, just like an attorney, your agent is under a duty to act for your benefit. If the power of attorney is “durable,” the power you have given continues even if you become incapacitated. However, any power you have given to an agent under a DPOA terminates upon your death.
A DPOA is one of the three legal documents in a basic estate planning package along with a Will and an Advance Medical Directive. A standard DPOA is written to give your agent the power to do anything you could do. Thus your agent can talk to the cable company, access your bank accounts, and even sell your house! It goes without saying that the choice of an agent is an important one.
The DPOA is an essential tool to protect yourself in the case of future incapacity. Let’s face it, we all know someone who has been diagnosed with Alzheimer’s or dementia. Alzheimer’s and dementia are easily the most common causes of incapacity. The conditions are incapacitating when they prevent a person from being able to handle his or her financial affairs. By creating a DPOA now, while still healthy, you can make sure that someone you trust has the power to conduct your affairs and protect you during incapacity.
By David Galinis