One frequently underestimated element of a comprehensive estate plan is the durable power of attorney. A durable power of attorney extends authority to the person of your choosing if you cannot make financial, medical or legal decisions on your own.
There are a few facts that everyone should understand about this essential document.
1. Durability ensures continuity
A traditional power of attorney becomes invalid if you become incapacitated. A durable power of attorney remains in effect, ensuring that you have someone to make decisions on your behalf when you need it most.
2. The role carries responsibility
The agent you choose for durable power of attorney should understand the importance of the role. Choose someone you trust implicitly. Have a conversation beforehand about your wishes and expectations to ensure that they take the role willingly.
3. Clearly defined contracts protect both parties
Take time to craft a durable power of attorney contract with clear, defined guidelines for your specific situation. Define the types of financial, medical and legal decisions you delegate to your agent, including contract signatures, authority to sell property or the right to pursue any other legal actions on your behalf. The more specific the contract, the less risk you have of any misunderstandings or misuse of authority.
According to Forbes, only 18% of American adults over the age of 55 have a comprehensive estate plan that includes a will, advance directive and durable power of attorney. Without this protection, your family may struggle to make decisions or access vital resources.