Putting a durable power of attorney into place is a critical part of any business, personal estate, or future needs plan. A regular power of attorney, where you give someone else permission to sign for something in your behalf, becomes invalid if you become incompetent or dead. And yet that is when you need someone else’s help in signing the most.
Should anything happen to you, you don’t want to have your assets and business tied up in court until they can name a conservator to carry on. Many think of deciding what will go to whom if you pass away, but what happens if you still live but are unable to handle your affairs? With all the advances in medicine and gains in expected life span, it is much more likely that you will become incapacitated than that you will die.
A regular power of attorney becomes ineffective if its grantor dies or becomes “incapacitated,” unless the grantor (or principal) specifies that the power of attorney will continue to be effective even if the grantor becomes incapacitated. Thus, a durable power of attorney authorizes someone else that you have chosen to manage your affairs when you are not able to. Canada calls this power an “Enduring Power of Attorney” because it endures.
Note though that any power of attorney, durable or not, ends immediately if and when you die. At that point, your living revocable trust becomes irrevocable and your successor trustee and the personal representative in your will take over.
Having a durable power of attorney does not mean you have to turn everything over to someone else as soon as you start having “senior moments”. Within the document, you should lay out provisions explaining exactly at what point you, the grantor, would be declared incompetent. And then it should list exactly what your agent will be allowed to do in your name. Do you want this particular agent to have control for only your personal affairs? Say so. Do you want to have a separate person handle your business affairs? Make a separate durable power of attorney to spell that out for a separate agent.
The durable power of attorney one of the four basic pillars of an estate plan. It ties the others together in making sure your wishes are carried out in a timely manner with a minimum of fuss.
Lee,
In reviewing the new Durable Power of Attorney that you provided to me it appears that there are conflicts, but I am sure I am reading it wrong.
In the Preamble, the last paragraph before Article 1, “my Agent may not act unless and until the events described in Article 8 of this document have occurred.”
In reviewing Article 8, the Durability Provision, the second sentence states: “Notwithstanding any provision herein to the contrary, my Agent shall take no action under this instrument unless (1) I am deemed to be incapacitated as defined herein, or (2) I have executed a certificate that from and after the date of execution thereof my Agent is fully authorized to act under this instrument.”
I read this that my Agent has no power under this DPOA until I am incapacitated or that I “have executed a certificate”. Is the “certificate” one that is signed by two physicians declaring my incompetency?
If that is the case and my Agent has no ability to act on my behalf, do I need to execute a General POA as well as the Durable POA?
If I am reading this wrong, please direct me to the passage that shows that my Agent can act on my behalf before either of the two provisions in Article 8 are enacted.
Thanks.
Betty,
The certificate is a certificate created and signed by yourself which gives the agent the power to act even though you are not incompetent.
Thanks for your helpful videos. On your web page for Durable Power of Attorney, the video link seems to be wrong. It links to a video about taxes.
https://legalees.com/durable-power-of-attorney/
However, I saw your video about Durable Power of Attorney on YouTube. You said the POA can be written so it only goes into effect when you are incompetent.
I’m reading the books about Estate Planning published by Nolo (a company you have recommended). Regarding a Durable POA, their attitude is that a provision about incapacitation should not be needed in a Durable POA.
They say that your POA agent should be someone you have great trust in. You and your agent should discuss the circumstances the POA will be used. If your agent is trustworthy, there’s no need to worry about improper use of the POA when you are competent. After all, if you can’t trust the agent to act appropriately when you are competent, how can you trust him to act appropriately when you are incompetent?
They also say that including a provision about incapacitation makes things more complicated if a doctor’s statement is needed.
What is your advice about this?
We have corrected the video link. Will post Lee’s answer to the other question soon.