Durable Power Of Attorney – Domestic Asset Protection Trusts
A Power of Attorney (POA) is a legal
document that allows you, the principal, to nominate an agent who
can represent you in legal matters. With a POA you can decide in
which legal matters your agent can represent you. For example, you
might specify that your agent only has the power to conduct matters
that pertain to your real estate, file income tax forms; deposit,
borrow, or transfer money in banking transactions, handle insurance
claims, et cetera. A Limited POA gives an
agent legal rights to handle certain matters. A General POA gives the agent the power to handle any and all business
POA For Business
Businesses commonly use POA documents. They are useful because they
allow a friend or family member to continue business even if you are
away. Many people think that their spouse is automatically granted
the right to represent them in legal affairs. This is incorrect.
Spouses usually have certain legal rights over matters jointly
owned, such as joint bank accounts. But, that is usually the extent
of their ability to legally act on your behalf.
POAs are limited, though, in that they do not provide power in case
you are incapacitated. This limitation means your company’s accounts
may not be accessible and others may not make large decisions. A
durable power of attorney can keep your company from being killed.
What is a durable power of attorney
There is a second type of Power of Attorney document you can
have that comes into effect only when you are incapacitated or
disabled and you cannot handle your own affairs. It’s called
a Durable Power of Attorney.
Life is full of unforeseen circumstances and difficult
decisions. A DPOA is a way for you to plan for an unknown
future and to protect your loved ones. It allows you to
appoint someone you trust to handle your legal affairs after
you are unable to carry them out yourself. If you do not have
a DPOA, the state appoints someone to take care of your
business and assets. Even if your spouse is fully capable of
handling decisions about your finances while you are
incapacitated a judge could appoint someone else whom you have
never met to handle your affairs.
It is important to understand that only a DPOA extends to
financial decisions after you are too ill to express your
wishes or are incapacitated.
It is also comforting to know that a DPOA only comes into
effect upon circumstances of your choosing. It can be as
specific or as broad as you wish it to be. Please note that a
DPOA does not take end-of-life decisions such as whether you
wish to extend your life with modern medicine such as
breathing tubes, dialysis, surgery, etc. For those decisions
you should have an Advanced Healthcare Directive (AHCD). Most people have an AHCD and a DPOA so that
both the business and the personal end-of-life decisions can
be made in accordance with their wishes.