Durable Power of Attorneys (“DPOA”) are a useful estate planning tool. What is a Durable Power of Attorney? It is a written, witnessed and notarized document in which you designate someone to handle your financial affairs. The document becomes effective upon execution and delivery of either a copy or an original to the person you have designated.
What does it do? It allows the person you have designated to handle your financial affairs. This can include accessing your bank accounts, brokerage accounts, safety deposit box, sign tax returns, sign deeds and mortgages and other such things.
Who do you designate as your Power of Attorney? Usually the spouse and any other person that you trust (child, family member, friend, others).
Why would you need a DPOA? The term “Durable” means that is survives your incapacity. If you are incapacitated with something like a stroke or dementia (think Joe Biden) and if you have done a DPOA, then you can bypass the Courts and guardianship proceedings. This is a big deal, because if you have a to go through a guardianship proceeding, the Courts can come in and declare you incompetent, take away your rights to make any decisions, and appoint someone who you may not have ever met to now be in charge of your life. In addition, the cost for a guardianship can be staggering.
It is all about choices and setting up the right documentation while you are able. Any person over 18 should have a DPOA. For example, if your child is going off to college, good luck trying to access anything from the University without a DPOA.
Hope this short summary helps you to understand what a DPOA is and why you should have one.
Tip of the Day: Good things happen to those who work hard