Many adults are at least vaguely familiar with the idea of powers of attorney. They know that people can sign documents granting others the necessary authority to handle financial or medical matters on their behalf. An agent or attorney-in-fact can pay bills, arrange for medical care and otherwise manage the needs of an incapacitated individual. However, fewer people are familiar with the idea of durable powers of attorney. They may find the term confusing and may be uncertain about what separates durable powers of attorney from traditional documents.
What is the function of durable powers of attorney in a comprehensive estate plan?
Durable documents retain their authority for longer
Standard powers of attorney can lose their authority in several scenarios. They stop being effective when the principal who drafted the documents dies or when they make a full medical recovery.
Basic powers of attorney can also lose their authority if the courts determine that the principal has become permanently incapacitated. That may occur in cases where individuals develop Alzheimer’s disease or dementia.
In that situation, an individual who drafted powers of attorney for their own protection loses that support. They may then be at risk of a guardianship. Durable powers of attorney protect people by empowering an agent or attorney in fact to continue supporting an individual until they recover or die.
Permanent incapacitation does not invalidate durable powers of attorney. They effectively give people a chance to choose their own guardian if they need extensive support in the future.
Those preparing for retirement or facing major medical challenges may benefit from drafting durable powers of attorney. Adding the right documents to an estate plan can help people protect themselves against as many potential future challenges as possible.