Durable power of attorney, or DPA as it is sometimes called, is a document that legally empowers another to act for you should you become incapacitated and unable to act for yourself. The document names an agent to handle financial, healthcare and /or business decisions and transactions on your behalf. It may be general or limited in scope. An example of a limited DPA is one which authorizes an agent to perform a specific task or tasks on your behalf, such as selling property. The agent has no legal authority to act beyond what is specified in the limited, that is, the agent is limited in what he or she may do on your behalf.
A durable power of attorney either goes into effect the moment it is signed and lasts for the lifetime of the principal (the person assigning the durable power of attorney) or until the principal cancels it. Durable power of attorney ends with the death of the principal.
A specific example of limited durable power of attorney is the durable power of attorney for healthcare. The type of durable power of attorney empowers the appointed agent to make decisions that specifically relate to healthcare and end-of-live decisions. In this sense, the healthcare DPA is similar to a living will, however, with a DPA, the agent can be the principal’s spokesperson and discuss medical treatments and options for the principal’s care. To better ensure that your wishes are carried out, it is recommended that you have both a living will and a healthcare durable power of attorney.
Advantages of Durable Power of Attorney
Durable power of attorney can provide you with peace of mind that your wishes regarding healthcare issues or business matters will be taken care of in the event that you become incapacitated. Additionally, the DPA is simple to execute and can even be done by the layman. However, the variance in state laws, as well as the need for exact wording, makes consulting an attorney the wisest course of action when assigning durable power of attorney.
Durable power of attorney can also save your family a great deal of time, money, red tape and headache. Without a DPA in existence, your family may have to go to court to obtain the legal right to act on your behalf.
Disadvantage of Durable Power of Attorney
The only real disadvantage of assigning DPA is the most obvious one. An unscrupulous or dishonest agent can wreak havoc with your financial assets when you are incapacitated. There is no supervision of agents holding durable power of attorney, therefore any legal remedy for wrongdoing usually takes place after the damage has been done.
For this reason, choosing an agent should be done with the greatest care and thought. The person you choose to give durable power of attorney should only be someone you can trust implicitly to act on your behalf and to have access to your financial resources and healthcare treatment. The durable power of attorney is only as effective as the agent you choose.