What is a durable power of attorney? Do I need one?
Several years ago I crashed while downhill skiing and shattered my tibia into about 40 pieces. I passed through the hands of seven different health care providers (the clinic at the bottom of the mountain, doctor contracted with the clinic, ambulance service, hospital, orthopedic surgeon, physical therapist), all outside my health insurance network. A brilliant surgeon found a way to reassemble my tibia, but my health insurance was a mess. While I tried to recover and get back to work, I asked my wife to contact my health insurance company to sort out my claims. Of course they claimed privacy prevented them from answering questions or giving any information. I draft powers of attorney for clients every day, but this was the first time I needed to use it myself. Below I have given some straightforward answers to questions clients often ask about this document. I hope you find it helpful.
What is a Durable Power of Attorney?
A Durable Power of Attorney is a legal document that authorizes a person you have chosen, known as your “attorney in fact” or “agent,” to manage you day-to-day financial decisions if you become incapacitated. The scope of power granted under a Durable Power of Attorney is normally broad, allowing your agent to do most things you could do for yourself. However, you may limit the power granted to your agent to very specific actions. My power of attorney authorized my wife to speak on my behalf to my insurance company and have access to my private information.
Do I need a Durable Power of Attorney?
Every adult person should have a power of attorney, regardless of our age or how much or how little property we own, to provide for the ongoing management of our financial affairs if we cannot make decisions for ourselves. None of use are immune from having an illness or accident that puts us out of commission for a period of time. If you become incapacitated, and you have not signed a Durable Power of Attorney, your family may be required to ask a court to appoint a conservator to handle your assets in the event of incapacity. This can be a complex and expensive process in which you do not have control over the court’s decisions.
Who should I name as my Agent?
Your Agent should be a competent adult who is completely trustworthy and willing to accept responsibility to make your decisions. Usually we look first to a spouse or close family member to serve because they are familiar with your desires and can be trusted to handle your assets carefully. Your agent does not need to live in the same city as you do, but in the event of incapacity, it is important that your agent be available to help. A Durable Power of Attorney should always name a successor agent to act if your primary agent cannot serve.
When does a Durable Power of Attorney take effect?
Typically, a Durable Power of Attorney takes effect upon signing. However, if you are reluctant to grant broad powers to act on your behalf when you are capable of acting yourself, your attorney can prepare a “springing power” that allows the power of attorney to spring into effect upon the happening of a specific event such as your physician’s determination that you are incapacitated.
Can I change or cancel a Durable Power of Attorney?
You can amend or revoke your Durable Power of Attorney at any time by notifying your Agent of the amendment or revocation. Otherwise a Durable Power of Attorney ends when your Agent receives notice of your death.
Please remember that this post is for general information purposes only. For specific legal advice, contact your attorney. If you think of other questions, please comment and let me know and I can add more details