Understanding the Rights of a Durable Power of Attorney
When planning for the future, a crucial document to consider is a durable power of attorney (DPOA). This legal tool can provide peace of mind by ensuring that someone you trust will manage your affairs if you cannot do so. But what are the rights and responsibilities of a durable power of attorney? Let’s dive into what you need to know.
What is a Durable Power of Attorney?
A durable power of attorney is a legal document that grants a designated individual, known as the agent or attorney-in-fact, the authority to act on behalf of another person, called the principal. The “durable” aspect means that the power remains in effect even if the principal becomes incapacitated.
Rights and Responsibilities of a Durable Power of Attorney
The specific rights granted to an agent can vary based on the language of the DPOA document, but generally, they include the following:
Financial Management
One of the most common uses of a DPOA is to manage the principal’s financial affairs. This can include:
1. Banking Transactions: The agent can handle all banking transactions, such as depositing and withdrawing funds, writing checks, and managing bank accounts.
2. Bill Payments: They can pay bills on behalf of the principal, ensuring that utilities, mortgages, and other obligations are met on time.
3. Investment Decisions: The agent can make investment decisions, including buying and selling stocks, bonds, and other financial instruments.
4. Real Estate Transactions: They can buy, sell, lease, or manage real estate properties owned by the principal.
5. Tax Filings: The agent can file tax returns and handle matters related to the principal’s taxes.
Health Care Decisions
In some cases, a DPOA can include the authority to make health care decisions, typically outlined in a separate document known as a health care power of attorney. If included, the agent can:
1. Consent to Medical Treatments: The agent can consent to or refuse medical treatments on behalf of the principal.
2. Access Medical Records: They can access the principal’s medical records to make informed decisions.
3. Choose Healthcare Providers: The agent can select or change healthcare providers and manage long-term care arrangements.
Legal Affairs
An agent under a DPOA can also manage legal matters, including:
1. Legal Representation: They can hire and work with attorneys to handle legal issues for the principal.
2. Court Proceedings: The agent can represent the principal in court, including filing lawsuits or defending against legal actions.
3. Contract Management: They can enter into, modify, or terminate contracts on behalf of the principal.
Limits and Responsibilities
While a DPOA grants significant authority, it also comes with responsibilities and limits:
1. Fiduciary Duty: The agent has a fiduciary duty to act in the best interest of the principal, making decisions that align with the principal’s preference and benefit.
2. No Personal Gain: The agent cannot use the principal’s assets for personal gain unless explicitly authorized by the DPOA document.
3. Record Keeping: They should maintain detailed records of all transactions and decisions made on behalf of the principal.
4. Revocation: The principal can revoke the DPOA at any time, as long as they are mentally competent.
A durable power of attorney is a powerful tool that provides a trusted individual with the authority to manage financial, health, and legal matters on behalf of the principal. This ensures that the principal’s affairs are handled according to their wishes, even if they become incapacitated. Understanding the rights and responsibilities associated with a DPOA is crucial for the principal and the agent to ensure that this important role is carried out effectively and ethically.
For more information or assistance setting up a durable power of attorney, contact Cannon Legal Firm for a free consultation at www.cannonlegalfirm.com.