What is a durable power of attorney?
A durable power attorney is a document that states a person of your choice can act as your agent or on your behalf on a long-term basis. The option of this person is not subject to any restrictions. The person you choose is known as an agent. The agent you choose can make critical decisions on your behalf if you become incapacitated to reason straight. The conclusion they can make include health, legal matters, and finances on your behalf. Suppose incidences in your life lead you to be incapacitated, and you don't have a durable power of attorney. In that case, your family must step in and appear in court and declare you incompetent before they can be permitted to make decisions over your finances.
Essense and eligibility of obtaining a durable power of attorney.
A durable power of attorney is beneficial in cases of medical emergency that might leave you unconscious. The document gives the ability to appoint someone who will communicate with doctors and make medical decisions. This document is known as a healthcare power of attorney. To obtain a durable power of attorney, they have to be of sound mind and capable of making appropriate decisions on behalf of the senior. The agent can only make the decisions as listed in a durable power attorney.
People who would like to have durable power are advised to inform their family lawyer. They should later sit with the chosen agent to make your wishes are known and their expectations in handling specific issues. They should be of sound mind when engaging the agent and understand the agent's power over their property. A durable power of attorney is only active upon authorization with the court of law. The Durable power of attorney is valid whether the principal gets to lose their mind and not remembering if they signed the document.
Guidelines in execution of the durable power of attorney
As an agent, you can only execute power within the description in the durable power of attorney. This calls for the need for the principle to be precise and clear in the description of the agent's authority to reduce friction between the agent and the third parties during the execution of the same in case the principal is incapacitated.
An agent is forbidden to execute some duties even if the durable power of attorney states otherwise. These duties include taking over the principles of voting and doing it on their behalf of the principal, Making a witness report in the principles place, create or revoke a will on behalf of the principal or in the case that the principal was authorized to be a guardian the agent can not take over such responsibility in case the principal is incapacitated.
The relationship of the agent and the principal bound by the law is entirely dependent on trust. In case of violation of the trust, the agent deserves to be punished both civilly and criminally unless a power of attorney legalizes such an act.
The power is effective as soon as the principles sign it. Changes are subject to the execution time frame when the principals state that the power of the principal is only effective when they get incapacitated. This is primarily the case. When it's time for you as an agent to execute your power, it's advised that on interacting with the third parties for the sake of transparency, you make a copy of the durable power attorney document and explain to them so that they understand it thoroughly before you take a step further. You need to sign on the document and indicate clearly that you are signing as an agent to the principal.
Fiduciary responsibility requires you as the agent to handle things reasonably with the principal. In managing their projects in instances that you are not sure of the course of action to take to execute the principal’s duties, it's advised that you seek professional help, which will, in turn, protect both you and your principal. Taking actions that are not prudent will make you liable to the third parties.
Importance of having a durable power of attorney.
- Opting for a durable power of attorney is one of the best practices, primarily when you have worked so hard to create wealth for your loved ones. Having an agent will give you peace that even when you get to the point that you are incapacitated, your people will be well taken care of, and the law is also watching over everything that pertains to the contract. The fiduciary engagement is solely based on trust.
- The law declares someone who is not mentally unstable unfit to be part of any court proceedings. Having an agent, you have empowered via a durable power of attorney will prevent you from being declared incompetent and unfit if there is a proceeding to be attended to as your agent will prudently represent you.
- People tend to lose a lot of the wealth they have created when they abruptly become incapacitated to run their daily life. Since they had not empowered anyone as required by law to undertake their legal duties, their property gets exposed to a high risk of loss as they can not decide or transact, ending up losing all they had worked so hard to acquire for their family. Without the consent of the principle, the court declares everybody who tries to execute directorial duties as a stranger.
- Engaging an agent by signing the durable power of attorney gives you the assurance that you have protected your interest and those you care about. Because these are three code elements, the family now can sue the agent if they are not acting prudently as per the signed contract.
Risks of having a durable power of attorney.
- With all these advantages of having a durable power of attorney, there are risks involved. The moment the durable power of attorney becomes active, they have the full legal authority to act on your behalf. This indicates that you should settle for someone you are sure they are trustworthy and have your best interest at heart.
- If the durable power of attorney is revoked for any reason, it's prudent to notify all the third parties in time so that they won't continue dealing with them lest they get you to a loss.
A durable power of attoney is a good option for securing your wealth and the sanity of your loved ones as long as you are sure of the person you are dealing with.Whether its health or financial related power of attorney it all serves for the best of your interest.With the involvement of the law you can be sure that it’s a wise decision to take.