THE NEED FOR A DURABLE POWER OF ATTORNEY.

AuthorMcCullough, Andrew S.

There seems to be some confusion when it comes to what a power of attorney actually is, when you might want to have one, and how to avoid an abuse of privileges. Here's what you need to know.

Life can come at you quickly. Accidents, health emergencies, and diseases of age may render you unable to manage your financial affairs. At some point, someone will need to pay bills, manage investments, and make financial decisions on your behalf. While incapacity can place a major strain on your finances, creating a durable power of attorney will help ease these potential burdens.

A durable power of attorney allows you to elect the person you would like to act on your behalf. That person is called your "agent," and the term "durable" means that your agent will have continued authority to act on your behalf, and that that authority does not extinguish upon incapacity, as may be the case with other power of attorney documents. While your agent is duty bound to act in your best financial interest at all times, they often have broad powers over your property. You can, however, place restraints on your agent in the terms contained in your power of attorney document.

CAN YOUR POWER OF ATTORNEY ABUSE THEIR PRIVILEGES?

Some individuals express concern that because an agent's powers are so comprehensive there is potential for an agent to abuse them. One way to address such a concern is through the use of a power of attorney known as a "springing" durable power of attorney. A springing durable power of attorney restricts your agent from acting on your behalf until you are determined to be incapacitated. At that time, and only at that time, your agent's authority "springs" into existence. In your springing durable power of attorney, you choose how your incapacity is to be defined, whether that is by recommendation of your primary care physician, by the recommendation of two independent physicians, or in the determination of a trusted family member or advisor. Preemptively...

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