What Do I Need to Know About Power of Attorney?
Power of attorney typically grants the agent specific powers to conduct financial matters for the principal. A healthcare power of attorney grants the agent the authority to make specific medical decisions for the principal, typically at a time with the principal is unable to do so, due to medical incapacity.
The Aitken (SC) Standard’s recent article, “The durable power of attorney,” explains that there are three different types: nondurable, springing and durable.
A nondurable power becomes operative right away, when executed by the principal. It remains in effect until it’s revoked by the principal, or until the principal becomes mentally incapacitated or dies.
The durable power states that it is to be revoked neither by the subsequent incapacitation of the principal, nor by the passage of time. The principal can change or revoke a durable power at any time, before the onset of mental or physical incapacity. Death of the principal terminates a durable power of attorney.
Springing powers are effective at a future date: the power “springs up” into existence when a specific event happens, like the illness or disability of the principal. An issue with springing powers that take effect when the principal is disabled, is that it may be hard to prove conclusively that the disability has actually happened.
The big advantage of the durable power is that it stays in effect after the principal has become impaired. The agent can act without court approval. It’s a good idea (and in some states the law) that you draft a different power of attorney document for financial matters and another, separate one for those powers pertaining to healthcare decisions.
Have this document in place long before a person begins having trouble handling certain aspects of life. Without a durable power of attorney, family would be precluded from making many important financial decisions or important healthcare decisions on behalf of the loved one.
Talk to an experienced estate planning attorney about all types of powers of attorney.
Reference: Aitken (SC) Standard (August 24, 2019) “The durable power of attorney”