Durable Power of Attorney
A Must Have Estate Planning Document
It is important that each adult in the United States have four legal documents. One of these is a "durable power of attorney". A durable power of attorney is a highly standardized legal document signed by an individual.
The durable power of attorney allows another person to take over control of the individual’s assets and business affairs when the individual becomes incompetent or otherwise unable to manage for him or herself. The individual making out the durable power of attorney is called the "principal", and the person who will take over for the principal is called the "agent". A "durable" power of attorney is distinguished from a "general" power of attorney, because it has a provision in it that says that the powers of the agent will endure beyond the incompetency of the principal. If you were to be judged incompetent, a general power of attorney would become ineffective. It was finally recognized that the time when a power of attorney was really needed was after the principal couldn’t function for himself or herself. Therefore, laws were written which made the power of attorney survive the principal’s incompetency.
Unless there is a durable power of attorney in place, it will be necessary for the court to appoint an agent or "conservator" for someone who has been determined to be incompetent. An important part of the durable power of attorney is the mechanism that will be used to declare the principal incompetent. If the durable power of attorney is written properly, the family can have the durable power of attorney take affect without any court intervention. If two doctors sign a statement signifying that a person or principal is unable to manage his business affairs, this will usually satisfy the criteria contained in a durable power of attorney. Sometimes a combination of clergy, trusted family members, or medical specialists can be used to verify a principal’s incompetency.
An agent named in a durable power of attorney can be given broad powers to manage the affairs of the principal. In addition to a principal’s financial matters, a durable power of attorney can give the agent authority to oversee the religious, social and medical concerns of the principal. A "medical power of attorney" only deals with medical issues. An individual has the option of combining the durable power of attorney, Health Insurance Portability and Accountability Act (HIPPA) agreement, medical power of attorney, and living into one master agreement, or keeping them separate.
All adult family members need a durable power of attorney, either combined as described above, or in distinct documents. Keep your signed forms available if problems arise. When a crisis develops, the durable power of attorney will play a big part in saving your family money, time and frustration.
Learn about the importance of having a durable power of attorney in Lee's new book "Guaranteed Millionaire" and also click the link for Lee's FREE DVD.Order Guaranteed Millionaire and the FREE DVD, Using the Law to Make Money and Protect Your Assets, now.
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