Estate planning can help people protect their loved ones. An estate plan can also protect the individual establishing the plan. There are numerous documents that take effect while someone is still alive but in need of outside support.
Powers of attorney are among the most important protective documents people add to their estate plans. By establishing powers of attorney before a major medical event, an individual can authorize someone else to handle their finances or their medical treatment. Oftentimes, people add financial or medical powers of attorney to their estate plans. However, they may overlook the need for a durable power of attorney.
What makes a durable power of attorney different than standard power of attorney paperwork?
Permanent incapacitation doesn’t affect durable documents
The main reason people create powers of attorney is to plan for a scenario in which they cannot communicate on their own behalf or handle their own affairs. They can choose someone they trust to pay their bills or oversee their treatment following a major medical emergency.
The documents they draft lose their authority if they die or if their condition improves. Powers of attorney may also lose their authority if the courts declare the principal permanently incapacitated. Someone in a persistent vegetative state or a long-term coma may require the support of an agent or attorney-in-fact for the rest of their life.
The standard power of attorney paperwork they signed previously may lose its authority when their incapacity becomes a permanent concern. Durable powers of attorney are different because they remain in effect in cases involving permanent incapacitation. The documents can continue protecting the principal until they die or their condition improves.
In a scenario where the courts might award another person guardianship over the principal, their durable documents protect them. Instead of being under the care of whoever seeks that authority, they have the option of appointing their own agent to manage their affairs for as long as necessary.
Involuntary guardianship is a serious concern for older adults, especially if they have valuable property. People with an interest in their assets may not necessarily act in an individual’s best interest when they are vulnerable.
Understanding what sets durable powers of attorney apart from basic documents can be beneficial for those thinking about the support they may need as they age. Creating an estate plan or expanding an existing one can help people prepare for retirement with greater confidence.
