When managing your affairs, especially in incapacitation, a durable power of attorney (DPOA) serves as a critical legal document. A DPOA grants a trusted individual the authority to make decisions on your behalf, ensuring that your interests remain protected even when you cannot decide for yourself. At Smith & Bledsoe Family Law, we understand the importance of having a well-crafted DPOA.
Durable Power of Attorney Responsibilities
When you designate someone as your durable power of attorney, you entrust them with significant responsibilities. Your chosen agent must act in your best interests, making decisions that align with your wishes and values. Some of the critical duties of a DPOA include:
- Financial management: Your DPOA can handle your financial affairs, such as paying bills, managing investments, and conducting banking transactions on your behalf.
- Property management: If you own real estate or other properties, your DPOA can oversee their maintenance, sell or lease them, and make decisions regarding their use.
- Medical decisions: Depending on the type of DPOA you establish, your agent may be able to make healthcare decisions if you become incapacitated.
- Legal representation: Your DPOA can sometimes hire attorneys, engage in legal proceedings, and sign contracts on your behalf.
Choosing a trustworthy and responsible individual as your DPOA is crucial, as they will have significant control over your affairs. Take the time to discuss your wishes and expectations with your chosen agent to ensure that they understand and are willing to carry out their duties faithfully.
Revoking Durable Power of Attorney
While a durable power of attorney grants significant authority to your chosen agent, it is essential to understand that you retain the right to revoke this power at any time, as long as you have the mental capacity to do so. If you decide that you no longer want your designated agent to act on your behalf, you can revoke the DPOA by:
- Creating a written revocation statement: Draft a clear and concise statement expressing your desire to revoke the DPOA, and sign and date the document in the presence of a notary public.
- Notifying your agent: Inform your designated agent in writing that you have revoked their authority under the DPOA. This notice should be delivered in a manner that provides proof of receipt, such as certified mail with the return receipt requested.
- Informing relevant third parties: Notify any banks, healthcare providers, or other entities with a copy of your DPOA that you have revoked the document. Provide them with a copy of your written revocation statement to ensure they know about the change in your agent’s authority.
It is crucial to keep your DPOA up to date and ensure that it reflects your current wishes. Reviewing and updating your DPOA can help clarify and interpret your intentions. Life changes, such as marriages, divorces, or shifts in family dynamics, may necessitate updates to your DPOA to ensure that your chosen agent remains the most appropriate person to act on your behalf.
Limitations of Durable Power of Attorney
While a durable power of attorney confers broad authority to your designated agent, it is essential to understand that this power has limitations. Some of the critical limitations of a DPOA include:
- Cannot create, amend, or revoke a will: Your DPOA cannot create, modify, or revoke your last will on your behalf. These actions require your direct involvement and must be carried out personally.
- Cannot change beneficiary designations: Your agent cannot alter beneficiary designations on your life insurance policies, retirement accounts, or other assets with named beneficiaries. If you wish to change these designations, you must do so yourself.
- Cannot make decisions after your death: A DPOA is only valid during your lifetime. Once you pass away, your agent’s authority under the DPOA ends, and your estate plan takes effect. Your DPOA cannot make decisions regarding the distribution of your assets after your death, as your will or trust governs this.
- Must act in your best interests: Your DPOA has a fiduciary duty to act in your best interests and cannot engage in self-dealing or make decisions that benefit themselves at your expense. If your agent breaches this duty, they may face legal consequences and be held liable for any damages caused by their actions.
Understanding these limitations can help you create a more effective DPOA that clearly outlines your agent’s authority and ensures your wishes are fulfilled.
Duties of a Durable Power of Attorney
Your designated agent must adhere to specific duties and obligations when acting as a durable power of attorney. These duties include:
- Acting in good faith: Your DPOA must act honestly and in good faith, always prioritizing your best interests.
- Keeping accurate records: Your agent must maintain detailed records of all transactions and decisions on your behalf, ensuring transparency and accountability.
- Communicating with you: If you retain the mental capacity to make decisions, your DPOA should consult and inform you about any actions taken on your behalf.
- Preserving your assets: Your agent must manage them responsibly, protecting them from waste, loss, or unnecessary depletion.
- Avoiding conflicts of interest: Your DPOA must avoid any situations that could create a conflict between their interests and their duties as your agent.
Authority of Durable Power of Attorney
A durable power of attorney can grant your designated agent a wide range of authority, depending on the specific language used in the document. Some common areas of authority include:
- Financial transactions: Your DPOA can manage your bank accounts, pay bills, invest on your behalf, and handle other financial matters.
- Real estate transactions: Your agent can buy, sell, lease, or mortgage real estate properties on your behalf. This authority allows your DPOA to make decisions related to your property holdings, such as negotiating the terms of a sale or signing closing documents.
- Business operations: If you own a business, your DPOA can make decisions related to its operation, such as entering into contracts, managing employees, and overseeing day-to-day operations. This authority can help ensure the continuity of your business in the event of your incapacitation.
- Legal proceedings: Your agent can represent you in legal matters, hire attorneys, and make decisions related to any ongoing or potential legal issues.
It is essential to carefully consider the scope of authority you wish to grant your DPOA and to discuss your intentions with your designated agent to ensure a clear understanding of your wishes. You may choose to limit your agent’s authority in certain areas or provide specific guidelines for decision-making to ensure that your interests are protected.
Contact Smith & Bledsoe Family Law
If you have questions about durable power of attorney rights or wish to establish a DPOA, please don’t hesitate to contact our office at (512) 277-3166. Our dedicated team is here to provide the knowledge, support, and advocacy you need to secure your future and maintain control over your affairs. Trust Smith & Bledsoe Family Law to be your partner in creating a comprehensive plan that protects your interests and provides peace of mind for you and your loved ones.