If you are taking an extended trip out of the country, you might want to think about empowering someone to be able to make important decisions about your estate while you are gone. When the time comes that you are not of sound mind and cannot make reasonable decisions for yourself and your wellbeing, you need to have already signed a form designating someone you trust as able to make decisions about your end-of-life care. This legal authority you are giving someone else is called power of attorney.
Power of attorney simply means you have given (as the principal) or been given the authority (as the agent) to take certain actions on behalf of another individual. It is a legal document, and there are two types: healthcare and financial. It is a good idea to create a separate, distinct form for each kind.
When does Power of Attorney Become Durable?
To become durable, the power of attorney document needs to lay out that the authority to make actions continues when the principal becomes incapacitated. This incapacitation happens when someone falls into a coma, slips further into dementia, and other medical events. By nature, a healthcare power of attorney is automatically durable. Medical power of attorney is referred to by different names in different states, including an advance directive, a health care surrogate, and other designations.
A financial power of attorney, however, is not, which means you will need to ensure it is designated as such when you sign it. The agent with financial power of attorney will If you do not make it durable, then it will expire upon your incapacitation. That will lead to court proceedings, which can be difficult on your family.
How do Durable Powers of Attorney Work?
To initiate a power of attorney, the principal and the agent must be of sound mind when entering into the agreement. After you sign a durable power of attorney, it can either go into effect when it is signed or when the principal becomes incapacitated. You and your attorney should make sure the language in the form explicitly states the situation in which the power of attorney becomes applicable. However, signing a power of attorney does not take away the principal’s ability to make financial or medical decisions as long as the principal is not incapacitated.
Estate planning can be a complex issue, and it is best not to wait to get your affairs in order. If you do not, you run the risk of a long and painful time in court for your family. To get things settled, call us at (334) 203-7521.