The durable power of attorney allows another person to take over control of the individual’s assets and business affairs when the individual becomes incompetent or otherwise unable to manage for him or herself. If you make out a durable power of attorney, you will be known as the "principal" and the one who will take over for you is called the "agent". The durable power of attorney has a provision in it that states that the powers of the agent will "endure" after the principal is incompetent. A general power of attorney won’t have such a provision. Upon a determination that you are incompetent, any general power of attorney you have created will be deemed ineffective. It was finally recognized that the time when a power of attorney was really needed was after the principal couldn’t function for himself or herself. Therefore, congress passed laws that provided for the power of attorney to have validity beyond the incompetency of the principal.

Everybody talks about the importance of a will or revocable living trust, but they overlook the importance of the durable power of attorney. You are more likely to be rendered incompetent and unable to manage your financial matters than you are to die within the next few weeks. From a legal standpoint, it is almost harder to have a person declared incompetent and take over their financial life than it is to deal with a dead person’s assets.

Without the durable power of attorney, a family will have to have a court proceeding to have a family member declared incompetent and someone appointed as their agent or "conservator". Each power of attorney should have a clause in it which lays out how the principal will be determined to be incompetent. A properly written durable power of attorney will allow the family to forego any court intervention for the transfer of responsibility to the agent. A principal can usually be declared incompetent, and unable to manage their business or financial transactions, if two doctors sign a statement affirming that the principal is incompetent. Combinations of doctors, family members, clergy, or others can be used to sign off on the principal’s incompetency.

A principal can assure his affairs are properly dealt with, if his durable power of attorney gives the agent appropriate authority. A person acting as agent under a durable power of attorney can help with not only financial and medical issues, but also religious and social matters of concern to the principal. When a durable power of attorney only deals with medical issues, it is called a "medical durable power of attorney". You can have a single document that includes the medical power of attorney, Health Insurance Portability and Accountability Act (HIPAA) agreement, and living will within your durable power of attorney, or you can keep them all as separate documents.

Every adult in your family should have a durable power of attorney. Choose the form or arrangement that best fits your needs. Sign the documents and put them where your family can find them and they will be safe. If an individual in your family has a problem, the durable power of attorney can save you time, financial stress, and heartache.

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