What is a Durable Power of Attorney and do I need one?

What if there was a way you could choose how you want your medical decisions to be made, when you physically and mentally cannot? What if you could even choose the person who you want to make those decisions? And what if you could choose someone to handle your financial affairs when you cannot? No one wants to consider these possibilities, but they happen to every family. So why not plan ahead and tackle these questions before they become grim realities? If you agree, then you came to the right place.

What is a Durable Power of Attorney?
Introducing the durable power of attorney. Essentially, this is a legal document that empowers another person with the capability to act in your place when you cannot. If you become incapacitated, the person who you designate to be your power of attorney will then handle your decision-making. You must be mentally competent when you ultimately create the document, in order for it to be effective. Among other things, a power of attorney has the capability to pay your bills, handle your medical care, and even monitor your investments.

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Quick Vocabulary Lesson: What does “Mentally Competent” and “Incapacitated” mean?
As you read in the paragraph above and as you will read below, the words “mentally competent” and “incapacitated” appear quite a bit in this area of the law. And you know of course (or you will hopefully come to find out), that your friends at JustLaw will go out of our way to ensure that you understand all legal terminology. And as you again will come to find out, we shun complicated legal jargon. Therefore, take a moment to familiarize yourself with these words below.

Mentally competent is relevant during the creation of the document. In order for the durable power of attorney to be valid, the principal must be deemed mentally competent. Some factors that define whether the principal is competent include, but are not limited to: ability to concentrate, consciousness, short and long term memory, ability to understand, capability to communicate, and the ability to reason logically.

Incapacitated is relevant at the time the durable power of attorney falls into the hands of the agent. Thus, in order for the agent to take over the medical and financial affairs of the principal, the principal must be incapacitated. To be incapacitated, for the purposes of a durable power of attorney, the principal is either mentally incapacitated, physically incapacitated, or has passed away. However, the principal must be deemed incapacitated before the agent may take over. Therefore, it is customary for the durable power of attorney to explicitly establish that the principal is not considered incapacitated until a physician declares them so.

What are the Two Types of Durable Powers of Attorneys?
The two types of documents you can create are for your medical and financial affairs. As for your medical affairs, the agent of the document will have the ability to decide your medical decisions when you are mentally incapacitated. On the other hand, the agent can handle your financial affairs as well. Duties of the agent could include, among other things, managing your investments, properties, bills, and family expenses. To make it easier on the agent, create two separate documents respectively for financial and medical affairs. While you should create two separate documents, you can still permit one agent to handle both your affairs.

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What is the difference between a Durable Power of Attorney and a Power of Attorney?
Both the power of attorney and durable power of attorney essentially serve the same function. The agent of each handles the affairs of the principal. There is one key difference between a power of attorney and a durable power of attorney. It falls on whether the principal (the one who created it) of the document is mentally incapacitated or not. If the person becomes mentally incapacitated, the power of attorney ends. Alternatively, the agent (person who would take over the principals affairs) of a durable power of attorney would stay in power of the principal’s affairs even after the principal is mentally incapacitated.

Why is a Durable Power of Attorney so Important?
In the unlikely event that you become incapacitated, and you do not have a durable power of attorney in place at the time, no one will have the authority to make your medical and financial decisions. For instance, imagine you become mentally incompetent from a freak accident and need immediate medical care and serious medical decisions made, yet you cannot make them yourself because of your incapacitation. If you do not have a durable power of attorney in place, your family is stuck and will have no legal authority to handle your medical affairs. To complicate matters, your family may have to go to court to get approved to handle your financial and medical affairs. Any application to the courts will be time consuming, potentially wasting precious time in an urgent situation.

Now you may be asking, what about my kids? While it is possible to create a durable power of attorney to handle the care of your minor children below the age of 18, this is more common for language in a will. Check out our thoughts on wills, on The Verdict.

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Any questions? Feel free to reach out to us. At JustLaw, our attorneys are standing by to help you.

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