Importance of Durable Power of Attorney
On one hand, we marvel at the advancement in medical sciences that has improved life expectancy. At the same time, it can’t be denied that we are seeing a rise in age-related mental and physical disorders.
You need to understand the options available regarding your financial future medical and mental care in the eventuality of a situation in the future where you are unable to make those decisions.
We understand that discussing and planning for financial, medical, and mental incapacity is painful and uncomfortable. We have witnessed grownup children shed tears when their parents talk of dementia, depression, osteoporosis, or even frequent falls. This is because we do not know about importance of Durable Power of Attorney.
That’s why we advise them to create a Durable Power of Attorney. You need this legal document, whether you realize it or not. What is a durable power of attorney? Why do you need one? How to put one together? Together, we’ll find answers to these questions and more in this article.
What is a Durable Power of Attorney?
As we age the challenges of old age dawn on us. More than once, the thought of what would happen if you are incapacitated by a fall, accident, Alzheimer’s, stroke, or any other calamity, would have occurred once you cross the age of 65. This is what Kurt Vonnegut once referred to as – a fate worse than death.
Executing a durable power of attorney (DPOA) is one way of ensuring your medical needs and financial responsibilities are taken care of if something untoward like losing your speech, movement, or cognition happens.
The Durable, Medical, and Mental Power of Attorney is a document signed by the principal giving authority to a person called a Proxy (also referred to as an Agent) to make financial, medical, and mental health care decisions.
The agent acts on behalf and in the interest of the principal when the latter is incapacitated. The financial and health care proxy acts as per the wishes of the principal as stated in the power of attorney.
The durable power of attorney is different from a normal POA. The normal POA loses validity when the principal becomes incapacitated. In contrast, the durable power of attorney stays in effect even after the principal is no longer capable of making decisions.
The durable power of attorney can come into effect immediately or upon the happening of events mentioned in the document. That is; the document stays valid until revoked, canceled by the court, or the agent is unable to continue. In the case of mental infirmity, a medical assessment by one or two doctors is a prerequisite for issuing a certificate of disability.
An individual can sign or execute a durable power of attorney only if he/she is of sound mind. The individual must be physically and mentally capable of consenting to such a document. As long as the principal remains mentally fit, he/she can amend or revoke the durable power of attorney.
Why Do You Need a Durable Power of Attorney?
In the absence of a durable power of attorney, family members of individuals unable to make decisions regarding their medical care need to approach a court to be appointed as a legal guardian.
The power of conservatorship or guardianship will allow the family members to take all the decisions regarding the person incapacitated. Alternatively, the court may on its own appoint someone as guardian conferring the power to act on behalf of the incapacitated person.
Seeking permission from the court is likely to take time. In addition, the family members, who are already under stress, cannot take crucial medical or financial decisions in the meantime.
Sometimes, the court may not consider any of the family members (or friends) as the right person to assume the role. The court might appoint a stranger, who may take a long time to understand the situation and/or will not know the wishes of the incapacitated individual as much as the family members do.
The delays and uncertainties about the future are easily avoided by a durable power of attorney document. The individual creating the POA will be free to appoint any trustworthy person. Plus, the individual can limit the powers granted to the agent.
Free will – the ability to act without constraint and at one’s discretion is one of the most cherished rights of a free man. Mental incapacitation or certain medical infirmities can take away your ability to act freely.
The durable power of attorney allows you to gain some control over your future by providing specific instructions to the POA agent. The Principal can leave instructions regarding their treatment preferences, life-support decision, and matters relating to lifestyle, quality of life, burial, etc.
There is no restriction on the powers that a creator of durable power of attorney can bestow of the proxy/agent.
The individual planning on creating a durable power of attorney can achieve peace of mind by focusing on two aspects: hiring the right person to draw the document and choosing the best POA agent who would make the best decisions at the right time.
Are There Any Drawbacks of Creating a Durable Power of Attorney?
Even a remote chance of losing control over your medical and financial decisions in the future should be enough for you to decide in favor of the durable power of attorney.
The drawbacks, you see here, are not to discourage you but to avoid pitfalls that might affect the execution of the document. Hence, it’s best to understand the drawbacks now to avoid any confusion later.
(a) The Impossibility to Foresee and Make Provisions for All Possible Financial and Medical Events
Past events and a person’s medical conditions may allow the principal to include certain specific instructions. But the principal cannot predict the future and anticipate every possible injury or illness.
Hence, the durable power of attorney must be so carefully worded to give the agent the freedom to take the best possible decisions. That said the principal can specify the boundaries within which the proxy can act freely to the best of his/her ability.
(b) Confusion Due to Unclear Instructions or Poor Drafting of the Document
The principal trusts the agent to make the right choices should the need arise. But the POA agent will have a tough time performing his duty if the principal fails to properly communicate his/her beliefs, values, and expectations.
Here, again, we need to stress the importance of drafting. The proxy may find it difficult to understand the wishes of the principal if the document is poorly drafted and its language confusing.
What Are the Different Types of Durable Power of Attorney?
In general, a durable power of attorney authorizes the agent to manage a wide range of matters including financial and medical.
A Durable Power of Attorney can be especially drawn to deal with financial matters alone. In this case, the document will be known as the Durable Financial Power of Attorney (DFPOA).
The person appointed to carry out the instructions is also called the attorney-in-fact. An individual or a company can act as the agent. The agent need not necessarily be a lawyer to become a POA proxy.
As an agent of a DFPOA, a person has the power to perform one or more of the following functions:
- Apply for governmental benefits
- File tax returns
- In certain situations represent the principal in a court of law
- Pay bills and manage bank accounts
- Buy, invest, and sell properties
- Manage retirement accounts
- Manage property and transfer property to a trust already set up by the principal
- Stake claim to property the principal is entitled to or is about to inherit
- Operate a business for the benefit of the principal
- Pay insurance premiums
- Buy and sell annuities and insurances
- Handle transactions with financial institutions including banks
- Collect Medicare, social security, and other benefits
- Use assets or income from assets to pay for the everyday needs and care of the principal
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Durable Power of Attorney for Medical and Mental Health Care
This is a special arrangement where the principal appoints a person to make medical decisions for you in case of medical emergencies. The emergency must be of such a nature that leaves the principal unconscious or unable to take steps for self-care. We need to realize importance of Durable Power of Attorney.
A durable medical power of attorney is different from a living will or an advance directive. The latter arrangement deals with a set of instructions regarding your treatment and other matters if and when you fall sick, are unable to communicate, and are unlikely to recover.
In contrast, the durable power of attorney allows the agent to take responsibility for your medical health when you’re unable to do so even if you’re expected to recover fully.
Can the Principal Appoint More Than One Agent?
In some states, it’s possible to appoint more than one person as the proxy. But, we discourage such a move because of the confusion it might create.
One of the main objectives of a durable power of attorney is the ability to make quick decisions. There is a high chance of delays when more than one person is involved in decision-making.
The principal can name alternate proxies, people waiting in the wings, who would fulfill the responsibilities if the main proxy is unable to perform his/her duties.
When Does the Durable Power of Attorney Come into Effect?
The document can be so worded to give immediate effect to the provisions. Alternatively, the principal may also wish that the document become effective only after his/her disability. It should be noted that the mentally competent principal retains the power to take decisions even if the document takes effect immediately.
Who Can Be a DPOA Agent or Attorney-in-Fact?
Although the principal is free to name anyone as the proxy or agent, you should consider selecting the person whom you can trust and rely on to get you through the tough period.
While considering your options take into account factors such as availability, location, education, medical and financial knowledge, integrity, and honesty.
How to Execute a Durable Power of Attorney?
Each state has different rules on how to execute a durable power of attorney. You should consult an expert on elder law or estate planning to make sure the document is properly drafted and executed.
You don’t have to be a high-risk individual to opt for a durable financial and medical power of attorney. Injury, accident, and ailments can incapacitate a person of any age and at any stage. You don’t want to put yourself or your loved ones in a situation where your medical care or financial future is determined by a court proceeding that may drag on for weeks or months. The durable power of attorney is an important document to have in place to protect your interests, in the future.
How to Create a Durable Power of Attorney Document?
It’s a fair assumption that a spouse or adult children would naturally become the financial or medical proxy for a legally married individual. Even so, to avoid any confusion and legal hassle, it would be prudent to confer a legal right on a person by creating a durable power of attorney. One can benefit a lot if he knows about importance of Durable Power of Attorney.
There are three ways to create a Durable Power of Attorney of Finance and Health Care.
(1) Use a Standard Power of Attorney Form Available on the Internet
You can download a do-it-yourself Durable Power of Attorney form that’s in tune with the various legal formalities of your state. While using an off-the-shelf document sounds like a fairly simple, workable idea, we would advise you against such a move.
Your medical history, unique circumstance, and future financial and medical requirements should be a check against going for the one-size-fits-all approach. Plus, there are many issues, including legal nuances, to consider while preparing a durable power of attorney.
Consult an expert in Durable Power of Attorney and elder law. The lawyer or legal document preparer will analyze your situation and needs to work out the best possible draft.
Another reason to avoid DIY durable power of attorney forms is that they are not comprehensive. Most ‘online’ Durable Power of Attorney forms fail to reflect on the basic needs and wishes of an individual.
You’ll rarely find a Durable Power of Attorney draft document that considers the spiritual, moral, religious, and cultural needs of people. Most of the forms don’t focus on financial emergencies, life-support treatment, palliative care, and after-treatment care.
With no one to guide you, there is a high chance you might miss one or more of these crucial questions. Only an expert will pose all the right questions before drafting a DPOA document.
(2) Consult an Attorney
Hiring an attorney is only slightly better than filling out a readymade Durable Power of Attorney form. Why is it so? Sure, an attorney can create an up-to-date document that represents your wishes and needs. But, is an attorney your best option?
If you’re approaching an attorney or legal firm, there is no guarantee that the attorney would personally handle your case. Even a small legal firm contains several staff members and there is no way for you to know who or how many are working on the document. This not only complicates the matter but also leads to unnecessary delays.
In addition, you might accidentally hire an attorney who is overworked and overburdened with other cases. This could also lead to delays.
You would probably end up paying an attorney three to four times more than what the drafting should normally cost.
(3) Hire a Certified Legal Document Preparer
The world is still not free from the grips of the pandemic, and most people we meet, talk of their precarious financial situation. Individuals wanting to prepare a durable power of attorney are looking for an affordable option. Besides, they don’t want to spend hours on the internet pouring over documents and learning legal terminologies to prepare their Durable Power of Attorney.
Luckily, for you, help is at hand. In Arizona, a Certified Legal Document Preparer can provide you with the same service as an attorney. Both are experts and come with the same skills. That said; you’ll find the legal document preparer more suitable for your needs because of the following reasons.
High Interpersonal Skills: In dealing with the elderly nothing is more important than empathy and compassion. The first task of a legal document preparer is to take the stress off your mind. They would listen to you, understand your wishes and needs, and then draft the document.
Cost-Effective: They provide premium quality work on par with legal professionals but at a fraction of the cost. You’ll be only paying for drafting a Durable Power of Attorney document and not for a whole firm. Even people on a strict budget can afford a legal document preparer.
Legal Skills and Experience: A certified legal document preparer is fully aware of the legal procedures governing durable power of attorney and elder law. The LDP will make sure the Durable Power of Attorney document is accurately drafted adhering to all the rules and statutes of the state.
Convenience: You don’t have to take a day off to visit the attorney or wait for days or even weeks for the attorney to visit you. A certified legal document preparer will work around your schedule. You can fix a time that’s convenient for you to discuss and share the necessary information.
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We hope you have gone through the importance of durable power of Attorney.