A general durable power of attorney is essential when it comes to incapacity planning.
Accidents occur unexpectedly and can happen to anyone.
There is no discrimination on age, gender, or socioeconomic status.
These events range from minor or catastrophic.
According to a recent Fed Week article titled “Considerations for Providing a Power of Attorney,” preparing for these accidents or illnesses is the cornerstone of incapacity planning.
Because bills will still need to be paid and finances will need to be managed, every adult should have a durable power of attorney.
What is a general durable power of attorney?
These documents allows the principal to authorize an agent to handle finances, endorse contracts, and sell and purchase investments on behalf of the principal if the principal cannot do so.
Many aging adults also find having a general durable power of attorney beneficial when they are weary and struggle to muster the energy and concentration to accomplish their personal financial responsibilities.
What if you do not want these powers to be effective immediately?
Some states, like Kansas and Missouri, allow for the creation of a “springing durable power of attorney”?
This means the agent will only have authority under the circumstances outlined in the document.
In some cases, the principal may choose for the agent to only have this authority after two doctors confirm in writing that the principal as incapacitated.
One of these doctors should be the personal physician of the principal, if available.
When creating a general durable power of attorney, the agent you select should be someone who has been proven trustworthy.
The best way to get your general durable power of attorney in order is to work with an experienced estate planning attorney.
You will also want to review your general durable power of attorney every few years and update them as needed.
As circumstances change, your agent may no longer be the best option to manage your affairs whether through a falling out, a move, or a death.
In this case, you will need to designate another individual.
Another reason for regularly reviewing and updating your general durable power of attorney is banks and other financial institutions often reject older powers of attorney documents.
You also may need to fill out a form with the institution if they require their own documents to be used.
Reference: Fed Week (Nov. 1, 2021) “Considerations for Providing a Power of Attorney”