(FinancialHealth.net) – When a family member needs help managing their financial affairs, filing a Power of Attorney, specifically, a Durable Financial Power of Attorney (Durable POA), allows a designated individual to perform financial tasks on their behalf.
A Durable POA provides the legal permissions necessary for someone else to pay household bills, living expenses, taxes, investments, purchases, and other financial tasks.
The responsibilities of a person with Durable POA can be either broad or limited, based on the scope outlined within the POA document. The scope can be as narrow as only being allowed to pay bills, or it can be as broad as giving them power to handle all financial considerations including the right to buy and sell assets on the person’s behalf.
A Durable POA, unlike a General Power of Attorney, has a unique “durable” status. This means that it remains in place even after the person who designated it has become incompetent or incapacitated.
At that point, the only way a Durable POA can be revoked is if a family member or another person of interest petitions the court and gains conservatorship. The conservator would then have the power to again petition the courts to revoke the Durable POA status.
Another aspect to consider when choosing a person to designate as your POA is to decide whether or not the same person should make medical decisions as well as financial decisions.
Some people choose to designate one person with the Durable POA to handle both medical and financial decisions, while others choose to have two different people to have a Durable Medical Power of Attorney and a separate Durable Financial Power of Attorney.
With the help of an attorney, consider the pros and cons of each before making the decision. With a dual Durable Power of Attorney, all decisions are in the hands of one person. That is significant power with significant responsibility. Choose wisely.
On the other hand, having two different people designated, one for Medical decisions and one for Financial decisions can create both safety and/or cause complications. For instance, if a person holding a Durable Medical Power of Attorney wants to make certain expensive medical treatment decisions, they may need to get agreement from the holder of the Durable Financial Power of Attorney to proceed.
Clearly, when choosing two POAs, consider that both people must have the best interest at heart of person they’re supporting, and a willingness to work in tandem with each other.
The decision to appoint or accept a Durable POA is one that should not be taken lightly. Keep in mind, that a POA is considered valid only if that designation is made while the person is uncontested to be mentally sound and capable of making their own decisions.
Choose carefully. Once filed, a Durable Power of Attorney can only be revoked by the person who gave it. If that person is later declared to be incompetent or incapacitated, they can no longer change their mind and revoke it.
~Here’s to Your Financial Health!
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