Powers of Attorney and Durable Power of Attorney
Generally, a Power of Attorney gives a person the right in some capacity to act on your behalf in your affairs. A person with sound mind and no mental incapacity can give another person the authority to act for them. This power to act can be specific or general in nature. That is, you can give a person the power to sign your name to a loan document if you are out-of-state for example. This is a specific power.
Or, you can give a person the power to act and sign all of your legal matters, including checks, bills, contracts, statements, loans, mortgages, guarantees and other items. Obviously, one should be extremely careful about giving anyone the general power of attorney, since it is very broad and you will be liable for all matters entered into by your agent.
A General Power of Attorney is deemed, in most states, to be voided at either the death or incapacity of the person making the Power of Attorney Durable Power of Attorney.
Durable Power of Attorney
A Durable Power of Attorney is much like a Power of Attorney but with one critical difference: The Durable Power of Attorney remains valid even if you are incapacitated or rendered mentally incompetent or unable to handle your affairs. In fact, this is the specific purpose for a Durable Power of Attorney. This legal document enables you to plan for an emergency which you may not fully expect or anticipate.
This document is a critical document for many people to have, since not having a valid Durable Power of Attorney in place can leave at least two areas of your affairs unprotected:
- any Power of Attorney which you have executed becomes void or invalid on the date of your incapacity or death, so that even if a person has a Power for Attorney, they cannot act in your behalf; and
- if you are rendered incapacitated unexpectedly, a Conservatorship, which can be a lengthy and expensive court proceeding, might have to be undertaken to manage your affairs
One can imagine that the date and time of incapacitation is not always clear. You can guess at the amount of lawsuits and court battles over the question of when a person became incapacitated. And, in most states, a Conservatorship is the legal proceeding by which the court orders a person(s) to manage your affairs and oversees this person(s) in their management. Sometimes, a Conservatorship can be opened in court for a person who may not believe they are incapacitated in any manner. Conservatorships are generally protracted legal battles, with lawyers representing each of your family members, or groups of family members, and lawyers representing other related interest in your estate, even though you may live for another 30 years!
You can easily see the benefit of having a legally recognized document, which is valid in your state, which may become effective and specify who and how to govern your affairs, if you become incapacitated. This one simple document can save thousands of dollars in legal fees, and thousands of hours in time wasted in an unnecessary court proceeding.
If you’re ready to prevent unnecessary conservatorship proceedings by creating your own Durable Power of Attorney, contact member services. We’re here to help. We’ll match you to an attorney that will make sure your document is valid in your state.