The Power to Act: Understanding Durable Power of Attorney and Its Scope
While we're young and the world is at our feet, we feel invincible and often don't think much about the future. We go wherever life takes us, do as we please, tackle every challenge life tosses, and generally have the liberty to make our decisions.
As we age, however, various health concerns and risks may cause us to worry about how we can continue to live independently. Thus, different what if scenarios may play out in our minds.
Thankfully a durable power of attorney can save the day when your situation changes. For a start, Burzynski Elder Law comprises a compassionate team of lawyers dedicated to helping the elderly through life care planning, asset protection, care coordination, estate planning, and more. You can also read about durable power of attorney by visiting their website. For now, let's cast a glance at the basics, including its scope and how you can prepare it.
Durable Power of Attorney (DPOA): An Explainer
Imagine that one day, while you're in your 60s, you attempt to recreate your favorite scene from Titanic on your inflatable pool raft (we've all done it, right?). Unfortunately, you suffer a mishap and suddenly can't make decisions due to poor health.
Or, you become incapacitated by an ailment such as dementia. As your world starts spinning faster than the carnival rides you once fancied, you need someone you can count on to manage your affairs. A DPOA could be the answer.
Essentially, it's a legal document allowing you to appoint a trusted person to manage your finances and make decisions on your behalf if you're not in a position to do so. Upon completion of the document, you transfer the power to make decisions to your agent, proxy, or "attorney-in-fact". Simply put, they can act once you lose your legal capacity, that is, you’re unable to make decisions. Thus, it pays to pick and choose the right person - one with your best interests at heart presently and in the future.
Depending on the nature of your affairs, you may appoint one agent or more. For example, you could nominate one person to manage your financial matters and another to make medical decisions. Alternatively, you can allow both attorneys-in-fact to collaborate in your interest.
Likewise, you can tweak or revoke the document by preparing a new version. The court may also step in and cancel the document. And if the proxy can't handle your affairs, the document may become void. However, ensure you get legal advice before creating or amending a DPOA to avoid confusion or disputes.
The Nuts and Bolts
To prepare or sign a DPOA, you should be of sound mind. This means you can't create the document after you've been diagnosed with a condition such as Alzheimer's or dementia. To that end, it's critical to create the document while you're still in good health.
Additionally, you must be 18 years or older to understand the document and make sound decisions. On the same note, the document must be notarized or witnessed for it to be legally binding.
When you appoint a proxy, ensure they understand their role fully to avoid disputes. They should also be aware of their legal obligations when managing your affairs and their liability if they fail to do so properly. Talking of responsibilities, here's an outline of some of the roles your proxy should assume.
- Manage your bank accounts
- Pay bills on your behalf
- Make medical decisions for you
- Represent you in legal matters
- Handle your tax returns
- Buy, sell, and maintain your real estate property
- Secure your financial future with an optimal retirement account management plan
- Care for your daily needs using your income or assets
- Make timely insurance payments to secure your coverage - car, home, health, life, and more
- Secure your rightful access to the property you are set to inherit or have inherited
- Keep your business humming along if you're unable to manage it
- Deal with financial institutions such as banks
- Maximize your retirement income by collecting Medicare and other available benefits.
A proxy can only act according to the document you create. Furthermore, they must abide by the laws and regulations applicable to your state or country.
For instance, a general DPOA allows your proxy to manage all the above affairs. Conversely, a special DPOA enables them to handle specific aspects, such as your finances or medical decisions. A springing DPOA, on the other hand, comes into effect once you become incapacitated or if a specified event occurs.
Also, given an agent's broad scope of duties, it pays to appoint a trustworthy and capable individual, company, or lawyer to serve as your proxy - a fact we cannot overstate. Ideally, they should be familiar with your financial, medical, and legal affairs.
When Does the DPOA Expire?
The durable power of attorney expires upon your death. As a result, your proxy's role ends when you pass away. Thus, they can't handle your affairs after the fact. For instance, they can't plan your burial, manage your property, or transfer your funds to your heirs.
Even so, a DPOA is an important document for elderly individuals as it assures them that someone can step in and help them if they're incapacitated. Whatever the case, this document is crucial when making long-term care decisions.
Ways to Create A DPOA
Basically, you can prepare a DPOA in one of three ways. These are:
- Hiring a lawyer to draft the document
- Utilizing online forms and templates
- Asking a legal document preparer to create it
Weigh each option before taking the plunge - by assessing its benefits and drawbacks. For instance, online templates aren't comprehensive, although they're convenient and cost-effective. On the other hand, a lawyer can help you create an ironclad DPOA that suits your needs precisely.
Also, some states have specific DPOA forms. Thus, if you opt for a DIY approach, ensure the document is valid in your state. You can find the guidelines on government websites or by consulting a lawyer.
Should the unexpected happen, don't let the court decide your financial fate or medical care to the detriment of your loved ones. Get your DPOA to secure your interests should you become seriously ill or disabled. This vital document could mean the difference between realizing and derailing your desires.