Durable Power of Attorney-Estate Planning
For good estate planning, every adult should have a "durable power of attorney", The durable power of attorney is just a form agreement used as part of an individual’s estate planning.
The durable power of attorney allows another person to take over control of the individual’s assets and business affairs when the individual becomes incompetent or otherwise unable to manage for him or herself. The individual making out the durable power of attorney is called the "principal", and the person who will take over for the principal is called the "agent". A general power of attorney doesn’t have a "durability clause", like the durable power of attorney has. The durability clause states that the powers of the agent will endure beyond the incompetency of the principal. A general power of attorney becomes ineffective after the principal becomes incompetent. It finally became obvious that a power of attorney is even more important if a principal cannot function. Therefore, congress passed laws that provided for the power of attorney to have validity beyond the incompetency of the principal.
The durable power of attorney is equally important to the use of a will or revocable living trust, even though it may receive less attention. It is many times more likely that you will be incompetent or otherwise unable to manage your financial dealings next week than it is that you will be dead next week. In the eyes of the law, it is easier to deal with a dead person’s assets than an incompetent person’s assets.
If a person doesn’t have a durable power of attorney, court action is necessary to have them declared incompetent and have an individual appointed as their agent or "conservator". Each power of attorney should have a clause in it which lays out how the principal will be determined to be incompetent. A family can save lots of time, trouble, and avoid court intervention, if they have a properly written durable power of attorney in place. If two doctors sign a statement signifying that a person or principal is unable to manage his business affairs, this will usually satisfy the criteria contained in a durable power of attorney. A principal’s incompetency is often certified by some combination of doctors, family members, or clergy.
A principal’s affairs will be well taken care of if appropriate powers are given to the agent in a durable power of attorney. A person acting as agent under a durable power of attorney can help with not only financial and medical issues, but also religious and social matters of concern to the principal. One type of durable power of attorney only deals with medical issues; therefore it’s called a "medical durable power of attorney". An individual has the option of combining the durable power of attorney, Health Insurance Portability and Accountability Act (HIPPA) agreement, medical power of attorney, and living into one master agreement, or keeping them separate.
Every adult in your family should have a durable power of attorney. Choose the form or arrangement that best fits your needs. Sign the documents and put them where your family can find them and they will be safe. When a crisis develops, the durable power of attorney will play a big part in saving your family money, time and frustration.
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