What is a Durable Power of Attorney and why might you need one?
What Is A Durable Power of Attorney?
A durable power of attorney is a legal document that authorizes another person, your agent, to act on your behalf. Your agent can make decisions and act on your behalf with respect to your property.
The “durable” of durable power of attorney means that your agent’s ability to act on your behalf is not terminated if you are incapacitated and cannot act on your own behalf.
Why Do I Need A Durable Power of Attorney?
A power of attorney is an important document to have in place just in case something happens to you and you are unable to act on your own behalf. Whether it be an accident that left you in a coma or an illness, like dementia or Alzheimer’s disease, a power of attorney would enable someone else to step in and manage your affairs and property on your behalf.
When Can My Agent Act On My Behalf?
A durable power of attorney is effective when executed or if you provide in the power of attorney that it becomes effective at a future date or upon the occurrence of a future event or contingency. Often the future event is incapacity. “Incapacity” means inability of an individual to manage property or business affairs because the individual has an impairment in the ability to receive and evaluate information or make or communicate decisions even with the use of technological assistance; or you are missing; detained, including incarcerated in a penal system; or outside the United States and unable to return. In this circumstance, this means your agent can only act on your behalf if you are unable to do so yourself.
What Can My Agent Do On My Behalf?
What your agent can do is up to you. You can be as broad or as specific depending on your situation. Generally, your agent can any action that you could take regarding your property, including managing your business and financial affairs, such as signing checks and depositing checks, paying bills, filing tax returns, managing your real estate and personal property, and managing investment accounts. Most importantly, your agent must act in your best interests when acting on your behalf.
Your agent cannot, unless you specifically stated otherwise, amend, revoke, or terminate an inter vivos trust; make a gift; create or change rights of survivorship; create or change a beneficiary designation; delegate authority granted under the power of attorney; waive the principal's right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan; or exercise fiduciary powers that the principal has authority to delegate.
Who Should I Appoint As My Agent?
You should select someone you trust to serve as your agent. This usually a family member or friend but can be anyone that you trust to act on your behalf. Unless you specify otherwise, generally the agent's authority will continue until you die or revoke the power of attorney, or the agent resigns or is unable to act for you.
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