A Durable Power of Attorney is a legal document that allows you to choose an agent (or “attorney-in-fact”) who can act for you in certain financial matters. It is an important tool to add to your estate plan, regardless of your wealth and financial status.
As with any other estate planning document, durable power of attorney must be created while you have the mental capacity to do so. Otherwise, it will not be valid and a conservator may need to be appointed through the probate court.
Appointing an Agent
You, as the principal, can appoint any adult you like to serve as your power of attorney. Frequent choices for an agent include a spouse, relative, trusted friend, or business partner.
Before appointing your agent, it is important to consider the various types of powers that you may grant to them.
Limited or General Powers of Attorney
You can be as specific as you like with the powers that your chosen agent will have under your power of attorney document. The more specific your document is, the more limited your agent’s powers may become.
Under a limited power of attorney, your agent will have authority that is limited to handling only the specific tasks you allow them to. You must go into detail to describe those tasks. For example, specific tasks could include withdrawing funds from bank accounts, paying your mortgage, leasing real estate, borrowing money, filing your taxes, or selling specific assets.
You can also use a general power of attorney. It gives broader authority to your agent and gives them power to act on your behalf for just about any type of financial transaction or task.
Durable Powers of Attorney
Another issue that affects the implementation of your power of attorney is its durability. A durable power of attorney allows the agent to continue to act in that capacity even if you become mentally incapacitated. There is specific language that would need to be included in your power of attorney document to allow for this durability. Typically, this language is desired.
Keep in mind that a power of attorney can be revoked by you, the principal, at any time so long as you are mentally competent to do so. While a durable power of attorney extends through your incapacity, it is by no means a “permanent” designation. You have the power to revoke it at any time you wish.
Court Appointed Power of Attorney
If you do not have a durable power of attorney in place and become incapacitated from injury, illness, aging, or other event, the court will appoint someone to handle your affairs in your stead. This person is typically called a conservator.
By being proactive and designating powers of attorney while you are healthy, you can be the one making this decision. You know who is best equipped and most trusted to handle the financial affairs of your estate.
For more information about establishing a durable power of attorney in Massachusetts and the specific powers you can grant your chosen agent, contact an experienced estate planning lawyer at Baker Law Group, P.C.
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