Glossary: Durable Power of Attorney

The durable power of attorney authorizes a person or entity to make decisions or exercise control over certain property outlined in the document. The agreement remains in effect even after the principal becomes mentally incapacitated. While a durable power of attorney can be used to pay medical bills on behalf of the principal, the agent or attorney-in-fact cannot make decisions related to the principal’s health.

When a power of attorney is durable, that means there’s language within the document which states an agent’s authority continues to apply if you become incapacitated. There is no automatic deadline by which these powers expire. A durable power of attorney stays effective until the principle dies or until they act to revoke the power they’ve granted to their agent.

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Depending on the laws of your state, you may not need to inform your agent that they’re named in the durable power of attorney. It’s also important to note that you’re not giving up control over your finances before you’re incapacitated. The agent has legal access as soon as the POA takes effect, but you can revoke their power at any time or for any reason. And in the meantime, you won’t lose any of your own access or control over your accounts.

A durable power of attorney is a legal document that a person signs to transfer control over some element of their life or property to another person. In the case of a durable power of attorney, the power is transferred immediately and continues to apply even if you become incapacitated. The person transferring the rights is the grantor. The person that the grantor chooses to pass these rights to is the agent or attorney-in-fact.

Some states consider all powers of attorney to be durable unless the document states that it is not. In those states, the power of attorney remains valid even after a person is incapacitated unless otherwise directed. There are four instances in which durable power of attorney can be canceled. This includes if the grantor revokes it, if it has an expiration date, if the grantor dies or if the grantor becomes mentally incompetent.

Durable powers of attorney may be limited or give your agent broad authority to handle all your legal and financial affairs, but your agent keeps the authority even if you become physically or mentally incapacitated. This means that your family may not have to ask for a court to intervene if you have a medical crisis or have severe cognitive decline such as late stage dementia.

Sometimes, medical decision-making is included in a durable power of attorney for health care. This may be addressed in a separate document that is solely for health care, like a health care surrogate designation.

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