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Power of Attorney
What is a Durable Power of Attorney for financial decisions?
A durable power of attorney for financial decisions gives another person (the agent) the authority to make financial decisions for the principal (person signing the POA). It does not remove authority or power from the principal. It does not give the agent power “over” the principal. The powers may be limited or broad. The language in the document controls the agent’s power and authority.The “durability” aspect of a power of attorney means that it remains effective even if the principal becomes incapacitated or incompetent. If a person is “incompetent,” then she/he is no longer able to sign a legal document such as power of attorney. In those cases, we must petition the court to have a conservator appointed. See “Conservatorship” on our website for further explanation.
What are some things to look for in a Durable Power of Attorney for financial decisions?
The document should state when it is effective. It may be effective immediately or only upon the principal’s disability. It should provide for a successor agent in the event the first agent cannot serve; an accounting clause such that the agent must account to someone else for fund management; the specific language required by the IRS to sign tax returns; authority to conduct litigation; authority to make property transfers; authority to establish revocable trusts and make transfers to the trust; authority to make gifts and more.
What is an “Advanced Directive” or “Power of Attorney” for healthcare decisions?
An Advance Directive for Healthcare decisions is a category that includes a durable healthcare power of attorney. In this document, the principal (or person signing) appoints someone to act as healthcare surrogate in the event of incapacity or disability. Things to look for in the Advance Directive:
- Did the principal name a successor agent?
- Is it HIPAA compliant?
- Does it provide for cremation if the principal wants to be cremated?
- Does it specify the principal’s wishes as to end of life issues such as a feeding tube, pain control, CPR, treatment of new conditions, etc.
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