Although every estate plan is as unique as the individual who creates the plan, there are some common documents that tend to be found in the average estate plan. A power of attorney is one of those. You probably have some idea what a power of attorney is and how one works; however, do you know what a “durable” power of attorney is? Because it is important that you do, the Oklahoma City estate planning attorneys at Parman & Easterday explain durable powers of attorney.
What Is a Power of Attorney?
A power of attorney, or POA, is a legal document that allows you (referred to as the “Principal”) to grant another person (the “Agent”) the legal authority to act on your behalf. The type and extent of the legal authority you grant to an Agent depends on the type of POA you execute.
General vs. Limited Power of Attorney
A general POA grants your Agent almost unlimited power to act on your behalf. This means that your Agent may be able to do things such as withdraw funds from your financial accounts, sell property and assets owned by you, and even enter into contracts in your name while the POA is in effect. Because of the broad authority you grant to an Agent when you execute a general POA it is imperative that you think long and hard before doing so.
A limited POA only grants to your Agent the limited, and specific, authority enumerated in the POA. For example, parents of minor children frequently make use of a limited POA to grant a caregiver the authority to consent to medical care for a child, should it be needed, during the limited period of time that the parents are away. You might also grant an Agent the specific power of attorney to act on your behalf in the negotiation and sale of a boat you listed for sale while you are out of the state for several weeks.
What Does It Mean to Make a Power of Attorney Durable?
Historically, a power of attorney automatically terminated upon the death or incapacity of the Principal. The problem with that was that for many people, the entire point of executing a POA was that they wanted a loved one to have the authority to act for them in the event of their incapacity. If, however, the POA automatically terminates upon the incapacity of the Principal, executing the POA will not fulfill that purpose. With that in mind, the concept of a durable power of attorney began to evolve. A “durable” POA is simply a power of attorney that survives the incapacity of the Principal. If you are considering making a POA durable, ask yourself the following questions first: “Do I want the Agent named in my power of attorney to be able to control my finances and/or make decisions on my behalf if I am incapacitated?” Keep in mind, however, that while a Durable General Power of Attorney grants your Agent a considerable amount of legal authority to act on your behalf, it does not grant your Agent the authority to make medical or health care decisions on your behalf. For that, you need to execute a special type of document known as an advance directive. If you do decide to make your POA durable, Oklahoma requires you to include specific language in your POA document indicating your intention to make it durable.
Contact a Parman & Easterday Estate Planning Attorney
For additional information, please join us for an upcoming FREE seminar. If you have questions or concerns about creating a durable power of attorney, contact an experienced Oklahoma City estate planning attorney at Parman & Easterday by calling 405-843-6100 to schedule your appointment today.
Yes. Referred to as a “springing” power of attorney, this type of POA only activates upon the occurrence of a specified event, such as the incapacity of the Principal.
Yes. The Principal always has the right to revoke the authority granted to an Agent under a power of attorney. Keep in mind, however, that if you execute a durable POA, your Agent’s authority will continue throughout your period of incapacity as you will be unable to revoke it.
To appoint someone as your health care Agent you must execute an advance directive known as an Advance Directive for Health Care in Oklahoma. Your Agent will have the legal authority to make health care decisions for you if you become incapacitated.
- Estate Planning for Small Business Owners: Securing Your Legacy - March 1, 2024
- Inheritance Planning Oversights: Addressing the Commonly Missed Details - February 27, 2024
- Revocable Living Trusts: Flexibility in Planning and Beyond - February 20, 2024