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What Is a Durable Power of Attorney?


A power of attorney is a legal document that transfers control of some of your personal responsibilities to another person. There are a few basic types of power of attorney, one of which is a durable power of attorney. With a durable power of attorney, you immediately transfer the power, legally allowing the agent to start making decisions on your behalf right away. The agent’s decision-making power continues if the grantor becomes incapacitated.

Do you need help integrating an estate plan into your overall financial plan? Speak with a financial advisor today.

Understanding Durable Power of Attorney

A durable power of attorney, sometimes referred to as a letter of attorney, is a legal document that a person signs to transfer control over some element of their life or property to another person. In the case of a durable power of attorney, the power is transferred immediately and continues to apply even if you become incapacitated. The person transferring the rights is the grantor. The person that the grantor chooses to pass these rights to is the agent or attorney-in-fact.

Some states consider all powers of attorney to be durable unless the document notes that it is not. In those states, the power of attorney remains valid even after a person is incapacitated unless otherwise directed. There are four instances in which you can cancel a durable power of attorney. This includes if the grantor revokes it, if it has an expiration date, if the grantor dies or if the grantor becomes mentally incompetent and decided to remove it.

You may not think you need a power of attorney, but if you need one and don’t have it, it will be too late. For instance, if you fall into a coma following an accident, are under anesthesia for a procedure or develop a disease like Alzheimer’s, a durable power of attorney will ensure your wishes are followed.

Types of Durable Power of Attorney

durable power of attorney

There are a number of types of durable powers of attorney. These vary by the type of decision-making power you are giving to your agent. The types of durable powers of attorney you may end up using are as follows:

  • General power of attorney: This is a broad power of attorney granting a variety of rights to your agent. For instance, let’s say you are planning to go abroad for an entire year, but you have a real estate portfolio you need tended. You can use a durable power of attorney to grant power to a trusted associate who can make decisions for your portfolio on your behalf, including sales, purchases and leases. General power of attorney is often part of an estate plan.
  • Special power of attorney: Also called limited power of attorney, this is when you want to grant only a specific power to your agent. This durable power of attorney could, for instance, focus only on investment decisions, including for your 401(k) or IRA. You’d maintain full control over all other aspects of your life but your agent could make investment decisions for you.
  • Healthcare power of attorney: This is arguably the type of power attorney in which durability is most important. Having a durable power of attorney is key to allowing someone to make medical decisions for you. This enables your agent to make medical decisions for you, including taking you off life support, if something were to happen. For this type of power of attorney you can also set up a combination of springing and durable power of attorney. This allows you to have it take effect at a certain age, but also have durability following an incapacitation.

How to Create a Durable Power of Attorney

These are the steps to creating your own durable power of attorney:

  1. Figure out which type of durable power of attorney you need and pick your agent.
  2. Buy or download a copy of the form you need. The exact form will depend on the state you live in, but it is key to get the proper paperwork. This is the time to have a lawyer help you with your durable power of attorney.
  3. Fill out the form or direct your attorney to do so. This is where you’ll name your agent and explain exactly what powers you want to transfer to them.
  4. Sign the document. In some states you must notarize the document, record it with your county or file it with a court or government office.

Choosing an Agent for Your Durable Power of Attorney

durable power of attorney

The most important decision for those making a power of attorney is choosing an agent. Despite the name, the person does not have to be an actual attorney, though they can be. The most important thing is that they are trustworthy and know your wishes.

For a healthcare durable power of attorney, it is especially important to pick someone you trust and with whom you have shared any preferences you have for end-of-life care. A spouse, child or trusted friend might be good choices for this situation. Being clear about your wishes is the best way to make it as easy as possible for your agent in the event they have to make decisions for you.

Bottom Line

A durable power of attorney grants some of your personal powers and responsibilities to another person. It generally goes into effect immediately and remains in effect even after you become incapacitated. Many people use durable power of attorney for healthcare reasons. It allows the person you choose to transfer power to to make decisions for you. Creating a power of attorney is fairly simple, but a lawyer can help.

Estate Planning Tips

  • As you make decisions about power of attorney and other estate planning matters, you may find it useful to talk to a professional. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • As you’re thinking about healthcare power of attorney, it’s important to make sure you have the health insurance you’ll need. That way your agent won’t have to worry about insurance problems if they have to make decisions for you.

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