As you put together your estate plan, one of the things you may want to look into is setting up a durable power of attorney. A durable power of attorney is a legal document that assigns a person the power to control legal, property and financial matters specified in the document.
The person who is assigned as the durable power of attorney continues to control those items even if the principal, you, in this case, become mentally incapacitated.
Why is a durable power of attorney a good option?
A DPOA is a good option because these powers allow someone you choose to make payments on your behalf and make decisions about your financial needs. Unlike a health care power of attorney, though, a DPOA can’t make decisions about your health care. You could choose to assign both powers to the same person to let them make those decisions, but knowing the difference between the two roles is vital.
When does a DPOA become active?
That depends on what you’ve established in your springing power of attorney document. This document will go over what needs to happen before your DPOA “springs” into effect. For example, the POA documents may not be able to be used until you have a specific health condition arise, like a traumatic brain injury or coma.
Be precise when you set up this document, so you can maintain control of your own affairs until you are truly unable to complete them on your own.
How do you decide who to use as your DPOA?
You will want to choose someone who is trustworthy and respectful. It may be wise to select someone who is an attorney or who has experience in law. You could also opt to establish the DPOA with a loved one who is an accountant or other financial professional.
In any case, you will want to have someone who listens to your wishes and has your best interests in mind. By choosing them, you’ll know that you are going to be protected even when you can’t make your own decisions about your finances and personal affairs.