A durable power of attorney is a legal leeway to delegate to a third party of your choice the powers to transact business on your behalf. The power mainly comes in handy when the person delegating the power is about to become incapacitated. It mainly covers financial and medical issues and is limited only to the duration of the incapacitation.
Though open for just about any other issue, this power is largely taken advantage of when handling financial decisions. These are the ones that are strict enough to warrant official powers. Considering the lack of a unified legal regime governing its operations and use, this power is signed as per each state law.
The durable power of attorney may handle the following financial tasks and purposes:
- Banking – Deposits, withdrawals, and inter-account transfers.
- Lending and borrowing
- Safe deposit boxes
- Government and statutory benefits
- Retirement plans and packages
- State and federal taxes
- Legal advice and proceedings
- Real estate
- Personal pieces of property
What is a durable power of attorney form?
A ‘durable power of attorney form’ is a state-issued and specific form that is filled out with the aim of delegating the power to act on behalf of someone to another person. The person delegating the power is called the principal whereas the one receiving the power is called the attorney-in-fact or the agent.
This is a form that is issued by the state and in most cases is available for download via the internet. It mainly comes in when the grantor is incapacitated and is hence unable to act on his own.
How to get a power of attorney
As explained severally above, this is a power that is delegated to a third party by a principal. For this reason, it is the principal who grants power. It cannot be initiated by a third party hence.
The principal basically looks for someone whom he can trust to handle his responsibilities. The person must also be sane and fulfills the bare minimum legal requirements. Upon finding a trustworthy person, the principal has to gather the following items:
- Agent – the trustworthy person who is to transact business on behalf of the principal.
- Successor agent – is someone who holds brief for the agent in the event that he is unavailable.
- 3 copies of the ‘durable power of attorney’ forms
- Notary public or witnesses
Durable POA Forms (by State)
Free POA Form
Frequently Asked Questions (FAQs)
Differences between ‘durable power of attorney’ and ‘general power of attorney.’
Both ‘powers of attorney’ entail the delegation of the power of transacting business to a third party. The durable power of attorney is however used when the principal is mentally incapacitated and hence unable to do so on his own.
The ‘general power of attorney’ on the other hand is used when the principal is still in his right state of mind. Its scope is hence limited and usually comes to an end as soon as the principal changes his mind.
Can medical POA and durable POA be the same person?
Why not? In both cases, the person has to be trustworthy enough not to jeopardize the health or wellbeing of the principal. Also, many jurisdictions do not impose any limit on who exactly may act on behalf of a principal. The principal hence has the discretion to appoint whomever he wants to act on his behalf.
Do i need to sign medical POA separately?
YES, you do! Unlike other transactions, medical issues are complicated and two-fold in nature. You not only have to specify the kind of trustee you would wish to take of your health but also aid in making critical decisions surrounding your own health.
Then, the ‘medical power of attorney’ also contains a living will that basically lets you make some crucial end-of-life decisions. It is for these two reasons that you cannot bundle your healthcare issues alongside other responsibilities.
Can an agent steal my property and money?
Of course, yes! That is why you have to choose that person whom you trust and is well known to you. In the unlikely event that the person eventually steals your property and money, there is no room for despair either. You can still seek legal redress in a competent court of law.
How many copies of POA should be signed?
Many jurisdictions require that you sign 3 copies. The first one is retained by you, the second one is retained by the witness whereas the third one is held by the state. Some may require an extra one to be held by the attorney who facilitates the entire process.
Can I make my financial decisions after signing the POA?
Why not? Delegating the powers to a third party does not in any way imply that you can no longer do so on your own. Moreover, you also have the freedom to quash those powers any day at any time.
Can I change an agent after signing the POA?
YES, you can! You have to follow the laid-down procedures though to make the new agent valid and legally recognized. Some jurisdictions may, however, impose a limit on just how many times you may change an agent. Be sure to familiarize yourself with these restrictions too!
Can I make any changes to the POA after signing it?
Yes, you can! As the change of agent above, there are procedures you have to follow to make the new changes valid. It is in your best interest to follow those processes to the later to prevent any confusion and ambiguities.
How to revoke the POA?
As a principal, you have the power to revoke this POA at any time. The processes involved vary from state to state. These differences notwithstanding, you will have to bring all the parties to the agreement on a round table and notify them of your intent. Lastly, you will also have to fill all the forms and deposit them with the relevant state office.