Giving someone the legal right to make decisions for you can be intimidating, but important. Here’s why you might need a durable power of attorney.
A power of attorney is often awarded to someone you trust so that they can make certain personal or business-related decisions on your behalf. However, a power of attorney contract is quite limiting and temporary. Perhaps you might need the person in question to work in your stead if you are going to be incapacitated or absent. In this case, what you need is a durable power of attorney.
But what is a durable power of attorney? How does it differ from a regular power of attorney?
You might already know that a power of attorney is a legal document that allows another person to make certain decisions on your behalf. Normally, this would be enough. However, this contract is viable as long as you are viable: It basically means that if for some reason, you are unable to act, then the power of attorney will be terminated.
This is where a durable power of attorney comes into play. The main difference between this and a regular power of attorney is that this contract is applicable even when the principal (the original creator of the power of attorney) is unable to give instructions. A power of attorney can be limiting and short-lived whereas a durable power of attorney is much more flexible and as its name suggests, ‘durable.’
Having discussed the differences between a power of attorney and a durable one, it’s now time to look at why you need a durable power of attorney.
To put it simply, a durable power of attorney is a very effective and important document that might save your life or the life of someone you love. Life is unpredictable, and there’s no telling what could happen to you in the future.
Some people get into bad car accidents or have some underlying genetic conditions (like Alzheimer’s) that will eventually render them incapable of doing normal day-to-day activities. If such a circumstance arises, then a lot of things are at risk. Here’s why having a durable power of attorney can help eliminate said risks.
Let’s say that you had a very important legal issue that you were dealing with that required you to appear in court with your lawyer. But what happens if you are unable to participate in the court hearings? In this case, the court might deem you inept, and this whole issue might take a turn for the worse.
If you have a durable power of attorney in action, then you won’t lose money and you’ll be able to save your precious time. You will be able to have everything in order and in your favor.
Running a business requires you to make crucial decisions regarding transactions or agreements with different clients. If for some reason, you are unable to perform those acts, you run the risk of your business gradually collapsing.
A durable power of attorney can help save your business; the appointed attorney-in-fact can make all those important decisions on your behalf. They can make transactions, sign contracts, or even buy property if needed. This will ensure that your family is provided for even when you are unable to get yourself involved.
In addition to dealing with your financial affairs, you may also need someone to oversee your medical decisions. A lot of healthcare facilities these days require you to have an authorized person make certain medical decisions when you yourself are incapable of doing so. If you haven’t awarded DPOA (durable power of attorney) to someone, then this might lead to some unnecessary difficulties. Once again, the DPOA will also come in handy when making medical decisions for you.
Not having a DPOA can also cause unnecessary complications when it comes to your retirement benefits. This means that without proper authorization, your significant other will not be able to access any of your retirement accounts. They will not be able to request changes or stop any possible distributions from happening. They won’t even get to receive said benefits after your retirement (while you are still incapable of acting).
Now that you know the importance of having a durable power of attorney, you must now decide who you’re going to appoint as your attorney-in-fact.
Appointing someone as your attorney-in-fact is similar to handing over all your power to them; a durable power of attorney allows them to access all your accounts, and they will be able to intervene in personal, business, and financial affairs. Moreover, the DPOA contract is completely confidential, meaning that whatever they do will not be discussed with outside parties.
It goes without question that you must give your rights to someone whom you blindly trust. Misuse of such contracts is certainly not uncommon, and in the event, someone does decide to do that, it’ll have a very bad impact on you and your family’s well-being.
Planning ahead with your legal needs is, therefore, very important. If you know that you might become incapacitated, then sitting down with your family and having a thorough discussion is the best thing to do. This will help you understand who you can trust—in some cases, your immediate family might not be competent to deal with your affairs. If that’s the case, then make sure you bring this up with your family members and your lawyers before deciding on appointing a third party.
Filing legal documents can be overwhelming at times. Even so, they are necessary for the betterment of your loved ones. Therefore, getting a durable power of attorney is a great idea, especially if you are aware that you might need someone to work in your place.
It’s certainly better than guardianship, which can be taken away from your assigned guardian if the court deems that they are unfit to perform that role. So while there’s still time, sit with your lawyers and devise the Durable Power of Attorney contract terms that will be best suited for you.