Durable Power of Attorney (DOA)
Durable Power of Attorney (DPOA) is a legal document giving authority to a trusted person to manage the financial and legal decisions of another person if they are unable to do so themselves.
Under this arrangement, the person granting authority is known as the Principal, and the person who has the authority is known as the agent or Attorney-in-Fact.
The term "durable" signifies that this authority remains effective even if the principal experiences mental or physical incapacity.
A Durable Power of Attorney is typically part of an Advance Directive, a series of legal documents that give instructions about the type of medical treatments and interventions a person may or may not want if they are unable to communicate.
However, when the document is specific only to health decisions it's known as Medical Power of Attorney.
When creating an Estate Plan it's important to choose a reliable and responsible agent because they will play a pivotal role in managing financial and legal aspects of the principal's Estate.
It's helpful to consult with an Estate Attorney to ensure that the DPOA aligns with the individual's unique estate planning goals and adheres to applicable laws and regulations.
Key points to consider in estate planning with a Durable Power of Attorney include:
Financial and Legal Authority: A DPOA is instrumental in handling a wide range of estate-related tasks, including managing bank accounts, executing real estate transactions, dealing with tax matters, making investment decisions, and executing legal documents such as wills and trusts.
Durability: The durability feature of the DPOA is pivotal for estate planning. It ensures that the agent's authority remains intact and functional even if the principal encounters a situation where they can no longer make decisions due to incapacity or disability. This durability aspect is vital to ensuring the seamless execution of estate-related tasks.
Specific or Comprehensive Authority: The estate planner has the flexibility to tailor the DPOA document to meet specific needs. The agent's authority can be as limited or as extensive as required, addressing specific estate planning goals and financial management preferences.
Revocable: Most DPOAs are revocable, allowing the principal to modify, revoke, or replace the document while they are of sound mind and capable of making decisions. This flexibility ensures that the estate planning strategy remains adaptable to changing circumstances.
Agent's Fiduciary Duty: The agent appointed in the DPOA bears a Fiduciary responsibility to act in the principal's best interests and manage estate affairs with diligence and integrity. Adherence to ethical standards is crucial, and the agent should avoid conflicts of interest.
Guardianship Avoidance: In the realm of estate planning, a well-crafted DPOA can serve as a vital tool to prevent the need for court-appointed Guardianship or Conservatorship if the principal experiences incapacity. This proactive measure can help streamline Estate Administration and protect the principal's interests.
