You Need a Durable Power of Attorney as Part of Your Estate Plan

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For good estate planning, every adult should have a "durable power of attorney." A durable power of attorney is usually just a standard estate planning form document an individual signs.
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." A "durable" power of attorney is distinguished from a "general" power of attorney, because it has a provision in it that says that the powers of the agent will endure beyond the incompetency of the principal. A general power of attorney becomes ineffective after the principal becomes incompetent. 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. Finally, laws were passed which made it so a power of attorney could "endure" after the incompetency of the principal.
The durable power of attorney is equally important to the use of a will or revocable living trust, even though it may receive less attention. You are more likely to be rendered incompetent and unable to manage your financial matters than you are to die within the next few weeks. From a legal standpoint, it is almost harder to have a person declared incompetent and take over their financial life than it is to deal with a dead person's assets.
If a person doesn't have a durable power of attorney, court action is necessary to have them declared incompetent and have an individual appointed as their agent or "conservator." An important part of the durable power of attorney is the mechanism that will be used to declare the principal incompetent.
A family can save lots of time, trouble, and avoid court intervention, if they have a properly written durable power of attorney in place. Usually, the durable power of attorney will say that the principal can be declared incompetent, for purposes of the durable power of attorney, if two doctors sign a statement saying that the principal can't manage their business transactions any longer. 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. A person acting as agent under a durable power of attorney can help with not only financial and medical issues, but also religious and social matters of concern to the principal. A durable power of attorney that deals exclusively with medical issues is called a "medical power of attorney." Today, the durable power of attorney, medical power of attorney, Health Insurance Portability and Accountability Act (HIPAA) agreement, and living will can all be combined into one big document or broken up into separate documents.
However you design your durable power of attorney, it is critical that every adult family member has one. Just execute the forms and keep them on file. When a crisis develops, the durable power of attorney will play a big part in saving your family money, time and frustration.
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