Vital Part of Estate Planning

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It is important that each adult in the United States have four legal documents. One of these is a "durable power of attorney." A durable power of attorney is basically a fill in the blank form document for estate planning every individual's estate plan has to include.
When the individual has an accident, gets sick or otherwise goes down, the durable power of attorney allows someone else to take over management of the individual's assets and business affairs. 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. It is more likely that you will be judged incompetent or unable to manage your affairs in the next month than it is that you will be dead. It is usually harder, from a legal standpoint, to take over a person's financial life and have them declared incompetent 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. If two doctors sign a statement signifying that a person or principal is unable to manage his business affairs, this will usually satisfy the criteria contained in a durable power of attorney. A principal's incompetency is often certified by some combination of doctors, family members, or clergy.
A principal's affairs will be well taken care of if appropriate powers are given to the agent in a durable power of attorney. The agent can also be directed in the durable power of attorney to manage the social, religious, and medical issues of the principal. A "medical power of attorney" only deals with medical issues. 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.
All adult family members need a durable power of attorney, either combined as described above, or in distinct documents. Sign the documents and put them where your family can find them and they will be safe. A durable power of attorney can come to the forefront and save you time, money and aggravation at the time of a family or individual hardship.
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