Q. How can a durable power of attorney be used?

A. There is a very good chance that you will have need of a durable power of attorney (DPOA) before you have need of your will. Some statistics state that fifty percent of Americans will become physically or mentally incapacitated before they die.

A durable power of attorney can be used for the following purposes:

  1. Avoiding Guardianship: A DPOA can be used to avoid the necessity of a court-appointed guardian. If you have given someone the power to act in your behalf, you have taken away the number one reason people are declared incompetent. If you are unable to sign documents on your own behalf, e.g. checks, medical forms, etc., someone usually has to be appointed to do so; a DPOA gives the individual whom you have selected the power to do that without court involvement.
  2. Paying Bills: A DPOA gives your agent the power to sign checks, pay bills, and generally manage your financial affairs. If you become unable to do these things and you have not executed the DPOA, you could easily find yourself in a guardianship position. A DPOA could help prevent this situation.
  3. Health Decisions: A DPOA can give powers broad enough to permit your agent to have access to medical records, to disclose those records to others, to employ and discharge physicians and to approve or disapprove treatment and/or procedures. The right to make these decisions should only be given to anyone whose decision-making is very similar to your own.
  4. Tax Returns: Even if you are disabled, the Internal Revenue Service expects to be paid. A DPOA can give your agent the power to handle all tax matters including filing tax returns. If you are incapacitated, it is important that you have selected someone to handle disputes with the IRS.
  5. Lawsuits: What happens if you are sued or are in the process of suing someone and you become disabled? A DPOA can give your agent the power to settle matters, defend claims and grant releases. The power can also be given to employ or discharge counsel.
  6. Continuation of Business Interests: A person who has significant business interests of any type should strongly consider the consequences of her/her disability. A DPOA is one way to give your agent the power to continue the business, to handle bank matters including loans, and, in general, to follow the business plan for the company.