There are times when you may be unable to take care of your financial affairs. If a Durable Power of Attorney is not prepared and signed appointing someone as the authorized representative (called the "agent"), no one will be able to help. The banker or stock broker will not otherwise allow a close friend or relative to access your accounts (unless it is a joint account) and get the money needed to pay bills or do other things to help you.
Although many states have rules against it, certain banks and other financial institutions will recognize a Durable Power Of Attorney only if it is on their own forms and if it is signed within the last few years. Find out from your bank or brokerage firm if any special rules apply in your state, and then follow them. It is a good idea to sign new forms every three years and destroy all old originals of the documents.
IMPORTANT NOTE: It is very important that, when one of these documents is prepared, it states "durable" on the top of the form. Non-durable Power of Attorney forms are available, but they expire when you become incapacitated. This is the exact time you want this type of document to be available.
Things an Agent Can Do for You under a Durable Power of Attorney
The powers that are granted to an agent can be virtually any power you have to conduct your own business affairs.
Choose the agent carefully. Although there are some laws to protect the person who signs the document, it is still vital that the agent be trustworthy and understand exactly what is expected of him or her in certain circumstances. These documents generally become effective as soon as they are signed, so caution is important.
Choosing an honest and well-intentioned agent is not enough. He or she may be called upon to make some complicated business decisions. Your spouse or other close relative who may not be able to make these types of decisions may be the wrong person for this important job.
What to Look for in an Agent on a Durable Power of Attorney
Look for an agent with these qualities:
SUGGESTION: Tell the attorney that you want to appoint a backup person in case the first person on the Durable Power of Attorney is unavailable in an emergency.
There are other documents which you should consider for your overall estate plan (such as a Living Will and a Medical Durable Power of Attorney.) Consult an estate planning professional.
The object of estate planning is to conserve your assets while making sure they are properly distributed, either during your lifetime or after you're gone. You want to be sure that your family and loved ones will be provided for after you die.
Estate planning lasts a lifetime. You'll need to monitor your situation to ensure it is current and meets your wishes.