A durable power of attorney is the most important document in estate planning. It appoints someone as your agent/attorney to make certain decisions regarding your financial and legal matters on your behalf.
It gives them the authority to make investment and business decisions on your behalf, manage your assets, pay your bills, and even take care of your family members when you are unable to.
Durable Power of Attorney vs Power of Attorney
A general power of attorney covers a wide range of activities, but it has more limitations than a durable power of attorney. An ordinary power of attorney is terminated if the person who appointed him/her becomes mentally unstable on incompetent.
But a durable power of attorney continues effectively even under these circumstances. It remains active until the principal decides to revoke it or dies.
How to Choose a Durable Power of Attorney
There are multiple important things you need to consider before setting up and appointing a power of attorney. Here are the five most important things you need to focus on when creating a durable power of attorney.
1. Nominate Someone with the Right Qualities
If you are asking yourself “How do I get a power of attorney?” then you can rest assured that there are multiple ways.
You have to appoint someone who genuinely cares and thinks about your best interest. He/she needs to be trustworthy, updated, and knowledgeable about your conditions, organized, and good in communication.
A durable power of attorney will be responsible for handling legal matters and guiding assets and investment. So he/she has to be well educated as well.
But above all, he/she needs to be honest and trustworthy. Most people look into their family members when appointing an attorney or agent. If none of the members is the right fit, look at your friends. You can also choose a trusted accountant or clergyperson for the job.
Another thing you need to consider is proximity. A durable power of attorney is appointed when you can not take action or make decisions by yourself. So if your attorney lives near you, it will be much easier for them to make frequent visits and complete all your tasks.
2. Consider the Number of Agents
You can appoint multiple agents. In that case, they can share their responsibilities or you can allot specific tasks to certain agents. One can pay your bills, one can tend to legal matters, and another can look after your assets and investments.
However, having too many attorneys can be a problem if they do not get along or misunderstand each other. Even if your document allows them to act on their own, disagreements can still occur.
The best option would be to appoint two attorneys. Even having two agents can sometimes be difficult. But having more just makes the situation cumbersome. Avoid creating individual documents for each agent. You can name two agents on the same form.
3. Consider Alternate Agents
If you do not want to appoint multiple agents from the get-go, appoint alternate agents. If your appointed agent cannot work, then an alternate agent will take the position.
You can appoint your spouse as an agent and name your children as alternate agents, so if anything happens to the spouse, the children can take control of the situation.
You have to be very precise when stating the rules of an alternate agent. You have to be clear about when someone can be titled an alternate agent and when the alternate agent can take over.
Identify under what circumstances the alternate agent’s authority becomes active. All of these have to be written in the form; otherwise, financial and legal institutions may consider an alternate agent’s actions as invalid.
Be sure to ask a professional to handle all the documents if you want to appoint one as an agent and one as an alternate agent since there are multiple factors to consider.
4. Don’t Let Emotions Influence Your Decision
Choosing a durable attorney is very different from choosing an injury attorney or any other attorney. It is even more difficult when choosing among your family members.
A durable power of attorney has to have the right skills and qualifications. If you do not find those qualities in your loved ones, look somewhere else.
Do not let your emotions get the best of you. Appointing someone qualified is always better than appointing the wrong person just because you did not want to offend them.
5. Keep Multiple Copies
Just like any other important documents, you need multiple copies of a durable power of attorney just to be on the safe side. In most cases, a copy is as good as the original, but some particular instances call for the original document.
To make real estate transactions, you will need to submit the original copy along with the deed. If you do not have it with you, you won’t be able to make the transfer. But if you submit the original, it will take months to get it back. In these cases only, it is best to have at least two or three original durable power of attorney documents so if one of the documents is engaged, you can use the other one accordingly.
You can keep one original copy and give the other one to your agent. Also, notify your agent where the other copy is, so they can use it when needed.
How Much Does a Durable Power of Attorney Cost?
The cost of setting up a durable power of attorney is about $300-$400. You will need to set an appointment for an estate planning evaluation or an appointment with a law firm to conduct the legal procedures. The legal fees can vary depending on your location and evaluation system.
Can You Remove a Power of Attorney?
Yes, you have the power to revoke a durable power of attorney any time you wish, as long as you are clinically and mentally stable. This has to be done in writing.
Once you are done revoking, notify your financial and other institutions about it immediately.
Final Thought
Creating and selecting a durable power of attorney is not that straightforward. You have to think about your best interests and appoint someone who’ll keep that in mind.
