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What is a durable power of attorney and how does it work?

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by Jessica Render ConsumerAffairs Research Team
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What is a durable power of attorney?

A power of attorney (POA) is a legal document authorizing an individual to handle specific matters, such as health and financial decisions, on the behalf of another. If the POA is deemed durable, the POA remains in effect if the person granting the authorization becomes incapacitated.

Durable powers of attorney are set in motion to protect people in case of a medical emergency or other situations where an individual is incapable of making a sound decision or choice. Many families assign a durable power of attorney to protect elderly or cognitively impaired loved ones.

A durable power of attorney can extend authorization to all pertinent areas of one's life, including medical and financial decisions, after an individual is unable to act on their own behalf. A durable power of attorney also gives you power over filing the respective individual’s taxes, applying for government benefits for another and managing their payments and bank accounts.

Once the individual passes away, the durable power of attorney authorization and responsibilities cease to exist. Since a will becomes effective after death, the individual assigned as the executor of the will takes over. The same individual can be appointed as a durable power of attorney and executor, if desired.

Power of attorney vs. durable power of attorney

Both types of POA grant similar authority. The key difference is when they can be used. A typical power of attorney ends if the individual granting power of attorney becomes incapacitated, while a durable power of attorney will stay in place. As such, a durable power of attorney is more appropriate for handling important end-of-life decisions.

A general power of attorney lets another person make decisions regarding signing contracts, paying bills, filing taxes and handling other important financial matters and medical decisions. There are also more specific types of power of attorney that grant only narrow power, such as granting authorization over only medical decisions, financial decisions or business decisions.

How to get durable power of attorney

To set up a durable power of attorney, first identify the individual receiving the power to make decisions on behalf of another and obtain their permission to move forward with the process. The person who the durable power of attorney is for must also grant permission and be of sound mind when making the decision to do so.

While durable power of attorney forms are available online, it is best to work with an attorney to draft these legally binding documents. Additionally, having separate durable power of attorney documents are beneficial for organized and streamlined financial and healthcare decisions. Both can be included in a single form, but can cause complications down the line if not separated.

Without these documents in place, families may end up going to court to receive power of attorney after an individual has been deemed unfit to make decisions on their own behalf, which can take valuable time that may not be available.

Revoking durable power of attorney

The desire to remove a durable power of attorney must be submitted in writing. This written document should include your name, a statement proving you are of sound mind when drafting this request and the reason for revoking the durable power of attorney along with all relevant dates.

This document must be signed and sent to any agencies with copies of the previous power of attorney forms. Be sure to designate and include the information of a new durable power of attorney, if applicable.

If you need to revoke durable power of attorney on behalf of a loved one, you should discuss your options with an attorney. If an individual is abusing their rights as power of attorney, there may be legal solutions.

A judge can revoke durable power of attorney if the individual with durable power of attorney authority is not acting in the best interests of the person they are responsible for. However, the court process requires several steps and the assistance of a qualified lawyer experienced in family law.

Concerned individuals must prove that the agent (the person with durable power of attorney authority) is neglecting their responsibilities on behalf of the principal (the individual who is unable to make their own decisions.) If still of sound mind, the principal can revoke a durable power of attorney at any time.

Durable power of attorney vs. living wills and other options

Powers of attorney, durable powers of attorney, living wills, advanced directives and guardianship — there are a lot of confusing legal terms and options available when it comes to ways to care for your loved ones and execute their wishes. Let’s break a few of these down.

Living will vs. durable power of attorney
A living will is also called a health care/medical or instruction directive. This document concerns your desires for medical choices and treatment if you’re unable to cognitively make sound decisions because of an illness or impairment. This can include your preferences for resuscitation and breathing tubes. A living will may also include your end-of-life wishes.

In comparison, a durable power of attorney only allows another individual to make medical decisions on your behalf when you become mentally incapacitated. This applies to both end-of-life decisions and regular medical decisions, including prescription refills and doctor appointments. Having a living will may make those decisions easier for the person you choose to grant durable power of attorney to.

Living trust vs. durable power of attorney
A living trust lets an individual maintain control over their property and the appointed trustees of their property while they are still alive. The appointed trustee takes over the will upon your death and manages it for those who benefit from it, such as your children, grandchildren and other loved ones.

In comparison to a durable power of attorney, the living trust only allows a trustee to manage the assets mentioned within the trust. The trustee does not have the right or power to manage any other property or assets. With a financial durable power of attorney, an individual of your selection handles your financial and asset decisions should you become incapable of doing so yourself.

These two options are commonly used in tandem when planning one’s estate.

Durable power of attorney vs. medical power of attorney
A medical power of attorney is a type of durable power of attorney. This distinction gives an individual the right to make medical and health care-related decisions on your behalf after you lose the ability to do so for yourself.
Advanced directive vs. durable power of attorney
An advanced directive is a legal document that tells your loved ones and medical team your preferences for health care. This can include the type of treatments you wish to receive along with whom you’d like to make decisions if you’re unable to do so. These documents only apply to medical matters.

A durable power of attorney, however, legally grants an individual the authority to make decisions for both your financial and medical needs.

Guardianship vs. durable power of attorney
If an individual can’t make decisions due to mental incapacitation or illness, the court will appoint a guardian to act on their behalf for legal, financial and medical decisions. This guardian or conservator must have a legal connection to the individual in question.

A guardianship occurs when a durable power of attorney has not been assigned. Additionally, many states require that a guardianship only occur when other methods, such as a power of attorney, have been ineffective.

Bottom line

Setting up a durable power of attorney in advance is a smart decision to ensure you’re well cared for if you’re unable to make your own decisions. Select a loved one you trust and who is comfortable acting on your behalf in stressful and potentially emotional circumstances. A durable power of attorney works well in tandem with other important legal documents like wills, living wills, trusts and advanced directives.

Consider setting up these items at the same time as you undergo estate planning. It’s important to make your wishes known for where you want to live, the type of care you want and any other end-of-life wishes for your final days, funeral or beyond.

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Profile picture of Jessica Render
by Jessica Render ConsumerAffairs Research Team

As a member of the ConsumerAffairs research team, Jessica Render is dedicated to providing well-researched, valuable content designed to help consumers make informed purchase decisions they can feel confident making. She holds a degree in journalism from Oral Roberts University.