Durable Power of Attorney

What Is a Power of Attorney?

A power of attorney is a written document in which one person -- the principal -- authorizes another person -- the attorney-in-fact -- to act on the principal's behalf.

What Authority Is Granted by a Power of Attorney?

The authority granted by a power of attorney depends on the type:

General Power of Attorney: The authority granted is very broad...the attorney-in-fact is granted essentially the same legal authority held by the principal. This means that the attorney-in-fact can exercise such powers as making gifts, buying and selling assets and filing tax returns on behalf of the principal.

Special Power of Attorney: The authority granted to the attorney-in-fact is limited to those powers specifically defined in the document.

The authority granted by both a general and a special power of attorney is typically limited to acts performed on behalf of the principal while the principal is competent, which brings us to a third type of power of attorney:

Durable Power of Attorney: The attorney-in-fact is authorized to act on behalf of the principal even if the principal becomes incapacitated. In fact, a durable power of attorney can become effective immediately, or it can become effective only if the principal later becomes incapacitated.

Why Should You Consider a Durable Power of Attorney?

In the event of future incapacitation, a durable power of attorney can be particularly useful in:

• Estate Planning/Management: The attorney-in-fact acquires the authority to implement an estate plan and manage the principal's estate during a period of incompetence.

• Daily Living: A durable power of attorney can give the attorney-in-fact the authority to manage such practical issues as making living arrangements for a disabled person and paying the bills.
  

As with any legal document, legal advice should be obtained
before entering into a power of attorney.

Disclaimer: The information, general principles and conclusions presented are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation, we are not engaged in providing legal and accounting services. This information should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

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