What to think about when drafting a durable power of attorney
This article looks at what a durable power of attorney is, why it matters, and how to appoint an agent.
Most people hope that they will be able to live a long and healthy life while being in complete possession of their mental faculties right up to the end. Unfortunately, unforeseen events can happen, including accidents and deteriorating health, that can leave one unable to make important legal, financial, and health decisions on one’s own. That is why a durable power of attorney is such an important element of any estate plan. A durable power of attorney allows people to appoint a trusted agent, such as a close friend or family member, to make financial decisions on their behalf.
What is a durable of attorney?
There are many different types of powers of attorney in California, including powers of attorney for tax purposes, for transferring vehicle ownership, and for medical decisions. A durable power of attorney deals specifically with financial matters. A person (called the principal) who creates a durable power of attorney does so in order to appoint an agent to make monetary decisions on the principal’s behalf.
Why a durable power of attorney matters
People typically create a durable power of attorney if they need financial matters taken care of which they are incapable of taking care of themselves. This situation can arise in a number of different contexts, from the principal suffering from mental health problems (such as Alzheimer’s) and no longer being able to make his or her own financial decisions to a person being housebound and needing an agent to go to the bank on their behalf. It is important to remember that a durable power of attorney remains in effect even if the principal regains their ability to make their own financial decisions. A nondurable power of attorney, on the other hand, is valid only under specific circumstances, such as if the principal cannot communicate or is mentally unwell.
Choosing a durable power of attorney
Clearly, an agent appointed by a durable power of attorney wields considerable power over the principal’s financial decisions, which is why an agent must be chosen with care. Because a durable power of attorney is concerned solely with monetary matters, it is important to appoint an agent who can be trusted with handling financial decisions. The agent should not have money problems of their own and should be somebody that the principal feels will act in their best interests. In many cases, the principal may choose to have an accountant or attorney act as their agent in financial matters.
Talking to an attorney
An estate planning attorney can help individuals deal with the various considerations that go into drafting a durable power of attorney. Estate planning is far too important to leave to the last minute. For better peace of mind, talk to an attorney who can ensure that a power of attorney is drafted properly and that one’s best interests are protected.