Document Your Last Rights And Wishes With A Durable Power Of Attorney
A durable power of attorney is much like a normal power of attorney except that it
continues to remain in effect even when the principal loses his or her mental faculties and thus becomes incapable of sound reasoning. Unless, and until, the power of attorney has been made durable, it will become ineffective in the event of the principal becoming incompetent. Thus, it follows that if the power of attorney is not durable, it would result in the family of the principal having to approach the courts to appoint a guardian or conservator over the assets of the principal.What differentiates a normal power of attorney from a durable power of attorney is the presence of a phrase such as "This power of attorney shall not be affected by subsequent disability or incapacity of the principal". The presence of such a phrase shows the intent of the principal that the authority that he is giving shall remain in force even if his mental health deteriorates beyond control. To make a power of attorney durable, it is subject to certain state laws. The Uniform Durable Power of Attorney Act has taken force in as many as 48 states in the US.
There are two requirements to a durable power of attorney. The first is that it shall be in writing and the second that it contain words to the effect that the power of attorney shall remain in effect even in the event of the principal becoming mentally incapacitated. Even though the Uniform Act does not specify that the agreement be notarized, most such documents have space for the notary's signature. A lot of states require that the agreement be notarized, especially in real estate matters. In addition, some states even require that the document be witnessed.
It is wise to have such an arrangement even if the principal and their spouse own everything jointly. In the event the principal becomes disabled, the spouse can still sign checks and withdraw money from jointly held bank accounts, but is unable to sell jointly held property or stock without the signature of the principal. In addition, the spouse is unable to change the name of a beneficiary to a life insurance policy or retirement benefit plan. Even though the principal holds everything jointly, it is wise for him or her to execute a durable power of attorney.
To revoke this type of agreement, the principal has to be of sound mind at the time of revocation. The revocation must be written and should be sent to the agent and to third parties, like banks. A conservator appointed by the court may also revoke the agreement.
Under normal circumstances, the durable power of attorney may have very broad terms of reference i.e. the principal may authorize the agent to do any and all things. However, there are cases when the agreement shall only confer specific rights to the agent. The main advantages of having this type of agreement are:
* You have someone to look after you in the event of mental incapacity
* You, not the court, selects the agent
* You save time and expense of not having to go to court
by: Wade Anderson