The closing on Emily’s house just happened to coincide with her all-expenses paid, non-refundable Caribbean cruise. The closing documents had to be signed in person, by either Emily or someone with her authority. She honestly did not know what she was going to do. This is just one example of how a durable power of attorney can help. If you’re wondering if you need a durable power of attorney, read on.
A power of attorney is a legal document. The person signing the power of attorney is called the principal. In addition, the principal names another person (the agent or attorney-in-fact) to act on the agent’s behalf. The powers granted to the agent can be very broad or very limited and make take effect immediately or upon the principal’s incapacity.
A durable power of attorney differs from a general power of attorney in a significant way. The durable power of attorney remains in effect after the principal becomes incapacitated. However, upon the principal’s death, powers granted in the durable power of attorney cease.
A One-Time Deal
Sometimes a principal signs the power of attorney for a specific limited time period or even for one transaction.
For example, Emily can sign a durable power of attorney to an agent who will then handle the closing on her house. If Emily chooses, she can limit the agent’s authority to this one transaction. However, if Emily decides to cruise around the world for a year, her agent could have the authority to handle some or all of Emily’s financial transactions for a longer period of time.
Durable powers of attorney are often included in an estate plan. In fact, they are useful for incapacity planning since the principal can choose when the agent takes authority.
For example, Emily is seriously injured while on her Caribbean cruise. She is no longer able to communicate or make any financial decisions. If she signed a durable power of attorney, her agent can immediately begin paying her bills and handling all her financial and legal matters. Without this important document, her family likely would have to ask a judge to appoint a conservator.
One important thing to remember is that a durable power of attorney does not give the agent the ability to make medical decisions. A healthcare power of attorney does name someone to make medical decisions for the principal.
Add a Durable Power of Attorney to Your Estate Plan
In answer to the question, “Do I need a durable power of attorney,” the answer is, “Yes.”
If your estate plan is incomplete, or you haven’t started one yet, talk to Attorney Bruce Adams. He is an Alabama attorney who knows how to handle to his clients’ estate planning concerns. Please contact Bruce at 256-237-3339 to set up an appointment or use our convenient Contact Form. Our office is located in Anniston, Alabama, but we assist clients in surrounding communities like Gadsden, Heflin, Talladega, and Pell City.