A Durable Power of Attorney, also known as a Financial Power of Attorney is a document that allows the “Principal” to give someone of their choosing, the “Agent” or “attorney-in-fact” the power to perform certain legal functions on behalf of the principal.
Is There More Than One Kind of Durable Power of Attorney?
Yes, there are two kinds: 1) General POA and 2) Special or Limited. A General power of attorney allows the Agent to perform whatever act the Principal has drafted into the document. A Special POA is limited to one-time transactions, such as selling or purchasing a home, or vehicle.
Who Should I Appoint as My Agent?
A Durable Power of Attorney is a very powerful document, as it allows the Agent to legally sign for you and perform legal functions, depending on the scope of the powers you decide to give the Agent. Thus, you should always carefully consider and appoint someone who you trust to handle these types of transactions. Learn more about Agents here.
When Is the Durable Power of Attorney Document Effective?
The document becomes effective as soon as the document is executed (properly signed), unless the document states otherwise. A “Springing” Durable Power of Attorney may state that the document only becomes effective upon a certain event, such as when the Principal loses mental capacity. Keep in mind that Durable Powers of Attorney are only effective when the Principal is alive. Once the principal passes away, all power/s the Agent had over the affairs of the Principal terminate. Further, if the Principal revokes the document, the Agent also loses any power the document once granted him/her.
Keep in mind that a Durable Power of Attorney is a document that grants a large amount of power into the hands of the Agent. Thus, it is important that you have an experienced attorney assist you in drafting and executing this type of document.