A durable power of attorney is a must-have estate planning document. In a Power of Attorney, one person delegates authority to another to make decisions, or take action on their behalf. The person who gives the authority is the principal. The one to whom authority is given is the agent – also called attorney in fact or a proxy. If the Power of Attorney is durable, the agent can make decisions for the principal if the principal becomes incapacitated and is no longer able to act. Some of the most frequently asked questions regarding a durable power of attorney are answered:
What authority is given to the Agent?
If you have a general Power of Attorney, you are usually granting broad authority to your agent. But, you can also choose to give only a limited Power of Attorney, which may authorize one transaction, or a few types of actions. Whether the powers given are broad or limited, the agent must do what is in the principal’s best interest.
Does a Power of Attorney take away my rights?
Only a court can take away your rights to manage your own affairs, typically in a guardianship or conservatorship proceeding. With a Power of Attorney, you do not give up the power to make your own decisions and act for yourself. You are simply authorizing your agent to act and make decisions for you, just as you could do for yourself. With a Power of Attorney, the agent has the power to act with you. As long as you are competent, you can revoke any Power of Attorney you have given.
What specific powers can be given to an Agent?
The powers delegated may include the power to deal with your money and property, including the power to pay bills, receive income, deposit and withdraw from your bank accounts and brokerage accounts, buy and sell investments, buy and sell real estate, borrow money, give mortgages, sign tax returns, open and close your account, and take other steps to invest and manage your property. A Power of Attorney may also include the power to establish your place of residence and to arrange for a home or home care services for you. A Power of Attorney also might include the power to make your health care decisions, although this may be best done in a separate, more specific Advance Medical Directive.