Durable Powers of Attorney

In most circumstances, adults have the legal power to make their own decisions. One of the most enduring decisions a competent adult can make is to select someone else to take over this power when necessary. 

The usual way to give another person authority to make decisions for you is to execute a durable power of attorney. If the power of attorney meets certain requirements, it may continue in effect even though you later become incapacitated. Such a power of attorney is "durable." Failure to designate another person to make decisions after your incapacity may mean that court proceedings are required. 

Some powers of attorney are restricted to financial matters, while others give authority to make medical decisions. The latter may sometimes be referred to as "health care powers of attorney," "medical powers of attorney," "medical directives," or similar terms, depending on the jurisdiction. Generally, the title of the document is less important than its contents. 

The signer of a power of attorney is usually referred to as the "principal." The person to whom the power is granted is called the "agent" or "attorney-in-fact." 

What You Need To Know

Every state and U.S. territory permits some form of "durable" power of attorney. Specific requirements vary among jurisdictions, but may include particular language or witness requirements. In some states, all powers of attorney are presumed to be "durable." 

While every state specifically permits durable powers of attorney for financial purposes, the rules for health care powers of attorney vary considerably. Most jurisdictions recognize the validity of such powers, and even states without specific authority may permit health care powers in practice. In some states, health care powers of attorney may be coupled with a "living will," describing the particular kinds of medical care the signer wishes to permit or refuse. 

A properly drafted power of attorney may preclude the need for court action, and may save substantial legal expense and invasion of privacy in the event of incapacity. On the other hand, in most jurisdictions powers of attorney are not reviewed or regulated by any agency. Consequently, the potential for abuse by agents under powers of attorney is great. 

Many states provide sample forms for financial and/or health care powers of attorney. Most states also permit substantial latitude to include or exclude specific authority. 

Despite general and sweeping language in many powers of attorney, most states do not require third persons to honor the power. Problems are especially frequent when trying to deal with real estate transactions, tax returns and government bonds. Powers of attorney are more likely to be honored if they specifically refer to certain assets or types of transactions. 

When acting under a power of attorney, the agent will ordinarily sign documents by referring to the power. The authority of the agent is limited to those items listed in the power of attorney. The agent must be prepared to fully account to the signer of the power of attorney (or the Court, if an action is commenced), even if no accounting is requested. Other than receiving a fee, the agent is not permitted to benefit personally from the power of attorney, except to the extent specifically included in the document. 

Where To Go For Help

Forms for powers of attorney are widely available. Many states provide sample forms (particularly health care powers of attorney) as part of their statutes. Computer programs promising valid durable powers of attorney are widespread. For many, these forms may prove to be adequate. 

Unfortunately, the sufficiency of power of attorney forms is usually tested only after it is too late to make necessary revisions. Caution should dictate that a competent professional be consulted prior to executing such a powerful and dangerous instrument.