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Financial Power of Attorney:
Who Needs One?

By Sandra Ray, Staff Writer
(Page 2 of 3)

Durable Power of Attorney:

A durable power of attorney is the one that often comes to mind. These are the legal documents that can start immediately and allow someone to act on your behalf until it is either revoked or upon your death. For individuals who are facing a chronic, debilitating illness or who may be preparing for a future incapacitation (such as a possible nursing home commitment), a durable power of attorney could fit these situations.

A durable power of attorney can be written so that it can be invoked at a future point in time. For someone with a chronic or potentially debilitating illness on the horizon, this type of instrument may be best to use. Usually a physician or other recognized authority will designate the time when an individual is no longer competent to manage their own legal affairs. At that point in time, the power of attorney will “spring” into place, allowing your agent to begin managing your financial obligations. For this reason, sometimes you may see references to a “springing” power of attorney.

Choosing Someone to Manage Your Affairs:

Deciding which type of power of attorney may be straightforward, depending on the circumstances. Finding a trusted person to manage your financial affairs may not be as easy. The “agent” can be a family member or friend whom you trust to manage financial affairs with the same due diligence as you would yourself. 
It is generally a good idea to appoint more than one agent, even if you specify that only one of them may act at any given time. For example, a husband gives his wife power of attorney upon finding out that he has Alzheimer’s disease. The wife subsequently becomes incapacitated and is unable to care for her affairs, as well as that of her husband’s. Having more than one agent appointed will allow the husband’s power of attorney to stay in force without possible legal proceedings over his affairs.

Preparation and Filing:

You can find standard durable and nondurable power of attorney forms online at several different websites, or an attorney may give you a standard one that includes powers that you can grant or strike, depending on your individual circumstances. An attorney can prepare one for you for a fee; however, it is not necessary for an attorney to be involved unless you have special circumstances to consider. 

A power of attorney is still valid, even if it is not on file at your local county clerk’s office. It does need to be signed in the presence of a notary public. It is especially important to keep originals safe, as sometimes banks and other entities will want to make a copy of the original when granting someone else access to your private financial information. 

 

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