DURABLE POWER OF ATTORNEY FAQ

What is a Durable Power of Attorney?

A Power of Attorney is a legal document where one individual (referred to as the “principal” or “grantor”) authorizes another to act on his/her behalf (referred to as an “agent” or “attorney-in-fact”). In some cases, Power of Attorneys can be drafted to allow the principal or even the attorney-in-fact to appoint successors to act as an attorney-in-fact in the event the primary attorney-in-fact is not able to do so. Once the Power of Attorney is in effect, it creates an agency-relationship between the principal and the attorney-in-fact until the Power of Attorney has been terminated, expires or is revoked. The word “Durable” in a Power of Attorney means that the Power of Attorney remains in effect even if the principal becomes mentally incompetent or incapacitated.

What is a “Springing” Durable Power of Attorney?

A “Springing” Durable Power of Attorney is a Durable Power of Attorney that takes effect when a specific event occurs (e.g. the principal’s disability, illness or injury). This is known as a “springing effect” - after the specified event occurs the Durable Power of Attorney will spring into effect.

What is the difference between a General Power of Attorney and a Durable Power of Attorney?

A General Power of Attorney typically terminates when the principal becomes incapacitated while a Durable Power of Attorney terminates when the principal dies or the Power of Attorney itself is revoked.

What powers does a Durable Power of Attorney grant the attorney-in-fact?

An attorney-in-fact’s powers are dictated by the provisions of the Durable Power of Attorney itself. A principal may provide the attorney-in-fact with a myriad of rights including, but not limited to, the power to enter into financial transactions, make medical decisions, or enter in contracts - all on the principal’s behalf. Because the powers granted to the attorney-in-fact can be so broad, the principal should very carefully review all of the powers granted and consider the potential ramifications of each.

Can an attorney-in-fact be held liable for negligent decisions?

An attorney-in-fact will generally only be held liable for actions that are considered willful misconduct, gross negligence or criminal.

What are the requirements for a Durable Power of Attorney to be valid?

Specific requirements for a Durable Power of Attorney vary from state to state; however, most states require the following:

• The principal and attorney-in-fact must be over the age of 18.
• The Power of Attorney must contain language that clearly indicates that the principal intends to create a Power of Attorney.
• The Power of Attorney must be signed and dated.
• The Power of Attorney must be notarized.
• The Power of Attorney must be signed by one or two witnesses.

When does a Durable Power of Attorney become enforceable?

Durable Power of Attorneys become enforceable upon their execution. There is no prerequisite that a Durable Power of Attorney must be filed or recorded.

When is a Durable Power of Attorney effective?

A Durable Power of Attorney can become effective on a specified date, upon its execution or after a specific event has taken place (see “Springing Effect,” e.g. incapacitation of the principal).

How can a Durable Power of Attorney be revoked?

Provided that the principal is not incapacitated, a principal may revoke the Durable Power of Attorney at anytime by: (a) enforcing the revocation provision in the document itself, (b) by signing a separate legal written document stating that the principal is now revoking the powers which were previously appointed to the attorney-in-fact, or (c) entering in a new Power of Attorney and stating that the principal revokes any and all prior written Power of Attorneys.

What is the effect to third parties of revoking a Durable Power of Attorney?

It is the principal’s responsibility to disclose a revocation to all third parties that may be affected. Until such disclosure of the revocation, the Durable Power of Attorney is still deemed to be in effect for those third parties who had previously relied on the Power of Attorney.

When is a Durable Power of Attorney terminated?

Typically a Durable Power of Attorney is terminated at the death of the principal, upon a specified date within the document itself, or upon revocation.

Is an attorney required to create a Durable Power of Attorney.

No, you do not need an attorney provided that all applicable state laws are followed when drafting, executing and enforcing the Durable Power of Attorney.