What is Durable General Power of Attorney?
A “Durable” Power of Attorney is a document that you create In case you yourself ever become mentally incapacitated and need another person to make decisions for you. “Durable” means the document will stay in effect until the time you become incapable of acting in your best interest. In the document, you can specify exactly how much and what kind of control you would like your trusted representative, or “agent,” to have.
Why Do You Need to Use a Durable General Power of Attorney?
You can choose from a regular, non-durable power of attorney or durable power of attorney. A regular power of attorney ends once you become incapacitated, whereas a durable power of attorney stays in effect after you become incapacitated.
In addition, you can have a general power of attorney or limited power of attorney. A limited power of attorney only covers one or a few transactions, such as authorizing someone to sign real estate closing documents for you. The limited power of attorney ends once your agent, also known as your attorney-in-fact, signs the closing documents.
When Do You Need to Use a Durable General Power of Attorney?
A general power of attorney covers many transactions. You can choose the transactions, and it can cover a wide range of financial and business transactions, including:
- Buying and selling real estate and other assets
- Managing investments
- Managing bills and bank accounts
- Applying for government benefits
- Filing tax returns
- Managing a business
- Signing contracts on behalf of an incapacitated business owner
- Managing the incapacitated business owner’s business
- Signing checks
- Depositing government checks
There are some things that an attorney-in-fact cannot do for you, including voting, making a will, amending a will, revoking a will, or contracting for marriage.
Are There Any Deadlines or Times for When This Form is Needed?
You should create a durable power of attorney as soon as you are legally able to do so because anything could happen at any time during your lifetime. A car accident or a sudden illness does not allow you the time to create a durable power of attorney after the incident.
What Are the Main Things That go on This Form?
Your name as the principal and the name of the person you are naming as your agent or attorney-in-fact must be on this form. Additionally, any transactions you wish your agent to handle for you should you become incapacitated should be on the form. For example, you might have your spouse buy and sell real estate and manage your bank accounts. You could create a second power of attorney to have your financial broker handle your brokerage accounts if you prefer to have a professional handle those transactions. If you want just one person to handle all of your business, you will name that person, plus all of the transactions.
What Are the Most Common Mistakes to Avoid?
When you are creating a durable general power of attorney, make sure you have anything you want to be covered on it. You cannot make general statements, such as allowing your attorney-in-fact or agent to handle all of your finances and business transactions – you have to specify the types of transactions. Other mistakes to avoid include:
- You should also be sure to choose your attorney-in-fact or agent wisely. You must completely trust this person to handle your financial and other transactions without stealing from you. You could choose a financial broker, an attorney, a trusted family member, or even a trusted friend.
- Remember that a durable power of attorney ends at the time of your death. If you need someone to handle your finances, business, and other transactions after your death, you will have to create a trust.
- Make sure the durable power of attorney is acceptable for your state. Some states have different requirements for the durable power of attorney.
- Make sure that you know your state’s filing requirements. For example, some states might require you to file a durable power of attorney prior to your incapacitation for it to be valid. For example, some states might require you to file a power of attorney that grants guardianship over your children with the juvenile court prior to the time you become incapacitated.
- Do not try to create a power of attorney if there is any question that you might be mentally incapable of making that decision as someone could argue the validity of the document in court. If the court agrees, then it will appoint an attorney-in-fact or agent, and it might not be the person you want to handle your affairs. For example, if you are in an accident and are in and out of consciousness, and your son asks you to sign a power of attorney, your other children could ask the court to deem the document as invalid.
Do I Need to Use a Lawyer, Accountant or Notary to Help Me?
Most states require you to notarize a durable power of attorney. If you know what transactions you want your agent to handle and you implicitly trust the person you are assigning this power to, you do not need to retain an attorney.
Why Use Our Durable General Power of Attorney Generator?
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