A durable power of attorney is an important part of an estate plan. With a power of attorney a preselected agent can be granted power over the financial affairs of the individual signing the document. This power can be limited to specific decisions, like handling the closing of a real estate sale, or it can be much broader in scope to allow the agent power over the individual’s financial dealings.
Estate planning is meant to prepare for contingencies beyond an individual’s control. A traumatic accident could leave an individual without the ability to manage his or her own financial affairs. Debilitating diseases, like Alzheimer’s, can affect a person’s ability to make sound decisions for him or herself. In these scenarios, someone must be appointed to do make decisions on behalf of the incapacitated individual. Preparing a durable power of attorney as a part of an estate plan accomplishes three things. First, it gives the power of appointment to the individual, instead of to a judge. Second, it avoids the need for a potentially expensive court proceeding necessary to make that appointment. Finally, a power of attorney may be used to respond to time sensitive issues without waiting for a court hearing to grant an agent the power to act.
A power of attorney provides much flexibility for the individual signing it. It can take effect only upon disability, or right away, regardless of disability. The level of detail and amount of instruction that is possible under a power of attorney is unlimited. It will always be quicker and more economical than a guardianship or conservatorship proceeding, and it will serve the disabled person’s interests better than the broad powers granted to an individual by a court.