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What is a Durable Power of Attorney?

| Jun 29, 2014 | Business Law

Before we can begin talking about power of attorneys, it is important to define what an agent and principal are. If it is your power of attorney, you are the principal. The agent is the person who is authorized to act on the principal’s behalf in the principal’s best interests as stated in the power of attorney or healthcare directive/living will. A principal can also appoint a successor or alternate power of attorney and it is generally a good idea to name an alternate in the event the first-named agent passes away, becomes ill, refuses to serve as agent, or acquires some other disability that prevents them from serving as agent.

Before an alternate power of attorney is allowed to take the reigns and start making the principal’s decisions, they must have proof that the primary agent is unable or unwilling to perform the tasks necessary. This can be proven by a doctor, a death certificate, or simply a resignation or renouncement of the primary agent in favor of the alternate.

A power of attorney is not recorded or filed with the government or court. It is kept by the principal and/or principal’s counsel as the case may be. In the event of a deed transfer, the power of attorney is often filed along with the deed.

The word “durable” means that the power of attorney will continue unaffected I the event of the principal’s sickness, disability or disappearance. It is a “lasting” power of attorney (unlike the type that a bank may have you sign which are limited in nature) and it is good until the principal dies, unless it is revoked.

A power of attorney can be rescinded by destroying the original and notifying the agent or agents that the power of attorney is revoked. It is a good idea to send the revocation by certified mail, restricted delivery, to ensure proof of receipt. It would also not be a bad idea to orally revoke the power of attorney, however, until others find out that the power of attorney has been revoked, they are free from liability if they continue to act based on the document presented to them. If someone uses the power of attorney after it has been rescinded, problems can be created so it is important to retrieve back the original and all copies of the power of attorney.

A power of attorney should be kept in a safe spot and it should not be left for others to copy. It is generally my recommendation that you allow your estate planning attorney to hold onto these documents until it is medically requested that the power of attorney be released to your agent. This prevents a lot of negligence in carrying out the duties and responsibilities of the agent. Presumably you should trust your agent, however this option allows you to be confident that your chances of being taken advantage of are reduced.