“Power of attorney” is a legal arrangement in which one person is empowered to make legally-binding decisions for another person. In many situations, power of attorney arises automatically. For example, parents have power of attorney over their minor children, and married individuals have power of attorney over their spouse, if the spouse becomes incapacitated. However, in some cases, it makes sense to affirmatively grant power of attorney when it would not arise automatically.
What Is Durable Power of Attorney?
There are many different types of power of attorney arrangements and "durable power of attorney" is the most extensive. Most power of attorney arrangements automatically expire when the principal (the person who granted the power in the first place) dies or becomes incapacitated. Generally, someone is deemed to be “incapacitated” when they are unable to make their own decisions due to:
Power of attorney can generally be revoked by the principal at any time. Since an incapacitated person cannot make a decision to revoke it, the law assumes that they would revoke it in such a situation, if they could. Also, incapacity can lead to a more involved form of care and control over the incapacitated person, such as guardian advocacy or guardianship.
However, durable power of attorney continues even if the principal becomes incapacitated. The principal has to make it extremely clear and explicit that this is the arrangement that they want.
When Is Durable Power of Attorney Most Useful?
Durable power of attorney is extremely useful if you want to make important healthcare decisions well in advance. For example, if you are injured and you do not wish to be kept alive by artificial means when there is no realistic chance at any meaningful recovery, you should make your wishes known to your family well in advance.
If your wishes are not in writing, these decisions will ultimately fall onto your next of kin, who may not honor them. To avoid this, you can grant durable power of attorney to a trusted friend or family member, who you know will respect your requests. They will then have the legal authority to ensure that your healthcare preferences are carried out in the event you become unable to express your wishes.
What Kind of Decisions Can My Agent Make On My Behalf?
Typically, agents have two types of decision making powers: financial and healthcare. An agent could be legally empowered by the principal to:
- Keep the principal on or remove the principal from life support
- Decide whether principal should undergo surgery
- Manage the principal’s assets
- Purchase or sell property in the principal’s name
- Purchase or terminate insurance
- File taxes on behalf of the principal
- Establish trusts on behalf of the principal
Can a Principal Have More Than One Agent?
Yes. Many principals may find it preferable to have different agents fulfill different roles. For instance, suppose the principal wants his wife to decide healthcare matters and a child who is a financial expert. It might be wise for the principal to divide the durable powers so that the wife has healthcare decision making powers while the child manages the finances.
A word of caution: if there is more than one agent, there could potentially be conflict among the agents. The financial agent might have to sell the house to pay the medical bills, even though the healthcare agent wants the principal to leave at home. If there is more than one agent, it would be very wise for the durable powers of attorney to spell out how to resolve disputes if one arises.
How Can a Lawyer Help?
As you might expect, granting durable power of attorney is not always a simple matter. If you think that this type of arrangement might be beneficial to you, you should speak with an estate lawyer who specializes in estate planning.