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Generally, a power of attorney is a legal agreement between an individual, referred to as the “principal,” and an “agent” or “attorney-in-fact” who has the right to act on the principal’s behalf. Often involving financial or medical matters, this power can be specific, such as a house sale, or general. It remains in place only while the principal is alive and competent to make decisions.
On the other hand, a durable power of attorney remains in place even if the principal becomes incapacitated, and stays in effect until the principal dies or revokes it.
What Is Durable Power of Attorney?
Many people consider a durable power of attorney when thinking through health care directives, says Christine Rollins, professor of law at Saint Louis University.
However, durable power of attorney may also involve making financial decisions while a person is incapacitated. The tasks that an agent can handle under durable power of attorney include real estate and insurance transactions.
“A durable power of attorney is more of a generic statement that, ‘If I am incapacitated, then I am giving this named person the power to make decisions on my behalf,'” Rollins says.
Durable power of attorney can take effect immediately and last throughout the time of incapacity, says Julie Gilgoff, associate professor of law at Indiana University Robert H. McKinney School of Law, where she teaches property law, trust and estates, and elder law.
People might consider a durable power of attorney if they are expecting to experience a medical event that will incapacitate them. Others may simply prefer to know that they have someone designated whom they trust.
Power of attorney is accepted in all states although rules and regulations differ, according to the American Bar Association.
Assigning power of attorney for health care is also called an advance directive, which is when someone puts in writing who they trust to make health care decisions for them and what is important involving their medical care.
Who Should Be Named Durable Power of Attorney?
People may consider a durable power of attorney in situations such as illness, risky surgery or disability.
The principal should “choose somebody that they trust to make the right decision, and it’s usually a family member or friend,” Gilgoff says. Many people choose a family member, such as a spouse or child, according to the American Bar Association.
A minor or someone incapacitated cannot be given power of attorney. During this process, a principal may consider adding a successor agent in case the main agent is either unavailable or unable to act. When naming more than one person to act as agent simultaneously, remember that they may not all be available, able to act when needed or in agreement about the best path forward.
Some people choose to have a single agent designated under a durable power of attorney because this person can make decisions around a variety of issues. Others prefer that they have agreements in place for specific situations. For example, they may select someone to make medical decisions and someone else to make financial decisions.
“You can make somebody in charge of property or something else,” Rollins says. “A durable power of attorney is kind of generic, and it’s kind of a catchall.”
Who Might Need Durable Power of Attorney
An individual who may become incapacitated or is worried about that happening may consider choosing a durable power of attorney.
Notably, a durable power of attorney has broader power than an agent named under a living will, which generally takes effect when someone has a terminal condition.
Make sure to have a conversation with the person you select, explaining how and why you chose them, Rollins says. “Sometimes people are surprised at who has been chosen.”
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