Documents declaring power of attorney give written authorization for a legal representative, called the “agent,” to act on behalf of another person’s private affairs, should that person (the grantor, principal, or donor) become incapacitated for any reason. Durable power of attorney specifically states that the agent has the legal right to continue to act on behalf of the grantor in the event of the grantor’s physical or mental incapacitation, including death. Durable power of attorney often goes hand-in-hand with healthcare power of attorney, and financial power of attorney.
Durable power of attorney documents allow the immediate transfer of responsibilities from the grantor to the agent. These responsibilities can include accessing bank accounts, paying bills, selling assets including a home, or making medical decisions by proxy.
If a durable power of attorney form is not filled out before an elderly relative or sick friend becomes incapacitated, the form may not be filled out if they are not considered competent to make the decision. “Durable” specifies that power is transferred to the agent before and after the grantor becomes incapacitated, although many people use durable POA’s like a “springing” POA, which does not legally go into effect until the grantor is incapacitated.
Powers Granted in Durable Power of Attorney
Grantors may transfer a number of powers through POA documents to their agents, including:
- Financial: this means the agent can act as proxy for investments, leases, loans, business, banking, safe deposit boxes, and tax forms.
- Legal: the agent can represent the grantor in any lawsuits or legal matters.
- Medical: in durable powers of attorney, the agent may make medical decisions, such as continuation of life support or DNR orders, on behalf of the grantor.
Although agents may take on many responsibilities on behalf of the grantor, there are some legal matters agents may not conduct, such as:
- Sign documents stating knowledge on behalf of the grantor: for example, if the grantor was witness to a car accident, the agent may not make statements about the grantor’s knowledge of who caused the car accident.
- Voting rights: agents may not vote in any public election on behalf of the grantor.
- Perform personal or business services under a contract: the agent may not perform a service under contract using the grantor’s name. For example, the agent may not write a book and claim the grantor wrote it.
- Create a will: although the agent may be given powers over the grantor’s estate, the agent may not create a legal will for how that property is distributed in the event of the grantor’s death.
Becoming an Agent with Durable Power of Attorney
Legal transfer of powers of attorney begin when the grantor, the agent, a notary, and at least one witness sign the document stating that the grantor agrees to transfer these responsibilities, and the agent agrees to take them on.
Once someone becomes an agent, they must take a copy of the document with them to a third party – a bank, for example – to prove that they have specific legal powers in specific capacities. This person is then legally able to sign some documents, such as personal checks, on behalf of the grantor, but must make a note of this legal distinction in their signature. For example, if the agent’s name is Jane Doe and she signs for John White, she should sign: Jane Doe, by John White as Power of Attorney. She could also sign Jane Doe, POA.
Once durable power of attorney documents have been signed and notarized, they are valid until the grantor revokes the powers. Third parties often do not know when this happens, although they can report cases they believe to be abuses of power, misconduct, or negligence. Sometimes, institutions will refuse to accept older durable power of attorney documents, although there is no official legal expiration date. If that is the case, or if a third party has questions concerning the legality of a durable power of attorney document, consult an attorney for help.
Oral Powers of Attorney
Some states allow oral powers of attorney, as long as there is one witness and a legal representative such as a notary. However, banks, the Internal Revenue Service, and most hospitals require written power of attorney documents so no one disputes the agent’s rights and responsibilities.
Free State Specific Durable Power of Attorney Forms